bad bank: Loans from Jaypee Infra, VOVL and GTL among 15 that can be sold to bad bank

Mumbai: Videocon Industries subsidiary VOVL Ltd, property company Jaypee Infratech, telecom infrastructure provider GTL Ltd, Visa Steel and Meenakshi Energy are among 15 companies with global loans amounting to ₹50,335 crore that commercial banks plan to sell to the bad news bank, National Asset Reconstruction Company of India (NARCL), people familiar with the matter said.

The outstanding loans for these five accounts are just over ₹41,000 crore. The list also includes three road projects – Sion Panvel Tollways Ltd, Supreme Panvel Indapur Tollway and Chhapra Hajipur Expressway Ltd – which are likely to attract investors, the sources said. The remaining accounts are Consolidated Construction Consortium Ltd, Rainbow Papers, Helios PhotoVoltaic Ltd, Mittal Corp, World Windows Impex India, Ruchi Worldwide and SSA International, the sources said.

NARCL will provide a binding offer to the lenders, after which the lead bank will hold a Swiss challenge auction inviting counterbids from other asset reconstruction companies. NARCL, being the lead bidder, will have the right to match the counterbid, if any.

The government had announced the launch of the bad bank in last year’s budget, but the launch was delayed after the Reserve Bank of India refused to approve a dual structure in which NARCL was supposed to acquire troubled assets. while India Debt Resolution Company Ltd (IDRCL) was responsible for the resolutions, as first reported by ET on January 3.

Following advice from RBI, the lenders have amended the arrangement so that there is a principal-agent relationship between the two, in which NARCL will be the lead agency acquiring bad debts while outsourcing its resolution to IDRCL, its agent. The NARCL will be the final authority to decide on the resolutions proposed by the IDRCL.

VoVL, the oil exploration company promoted by Venugopal Dhoot, which has been admitted by the National Company Law Court for bankruptcy proceedings, has received expressions of interest from state-owned companies ONGC and Vedanta, among others. The resolution professional has extended the deadline for applicants to submit a firm resolution plan. According to the list circulated among the lenders, an unpaid claim of ₹22,128 crore will be transferred by SBI led banks to NARCL.

Among others, Jaypee Infratech is at an advanced stage of resolution. The lenders have approved a plan submitted by Suraksha Realty with Lakshdeep Investments and Finance and the court is due to hear details of the plan on February 7. The lenders will transfer ₹7,950 crore of Jaypee Infratech loans to NARCL, the people said. Jaypee Infratech’s resolution has been going on for more than four years as it was among the first 12 companies that RBI asked lenders to refer to NCLT in August 2017.

Last June, the lenders had drawn up a list of 22 companies to be transferred to NARCL. This was revised to 15 names last month to exclude companies such as Lavasa Corporation and Amtek Auto since their resolution is nearly complete. Incidentally, SBI-led banks excluded Anil Dhirubhai Ambani Group promoted Reliance Naval and Engineering Ltd (RNEL) from the top list, which surprised some market participants.

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