Banks will now take separate approvals from their respective boards earlier than assigning the debt to Acre, these individuals mentioned.
“There was no different bidder so one can now say Ares has received the bid. Banks are nonetheless engaged on inside processes to take approvals to provide the go-ahead for the takeover by Acre, and the method will take just a few extra days,” mentioned an individual aware of the train.
To make sure, Acre’s provide of ₹811 crore was simply above the ₹810 crore reserve value set by banks. Nevertheless it ensures a 54% restoration for banks.
Acre is backed by its mum or dad Ares SSG, an Asia-Pacific-based various asset supervisor with over $7 billion in belongings.
A second particular person conscious of the plan mentioned the vast majority of the funding for this acquisition is coming from Ares SSG. Sometimes such massive funds buy debt on behalf of firms who step in to take over the distressed firm later. Acre ARC didn’t reply to an electronic mail in search of remark.
The takeover by Acre might be a fruits of the method began by lenders led by in November which had invited expressions of curiosity from asset reconstruction firms to take over Nagarjuna’s debt of NFC after makes an attempt to provoke an insolvency course of towards the corporate had been stonewalled by the promoter.
Bankers mentioned delays within the courtroom case and coping with a troublesome promoter tilted the scales in favour of promoting the loans to an ARC.
IDBI Financial institution, with ₹568 crore of publicity, is the lead lender and is managing the sale on behalf of a seven-bank consortium. Different massive lenders embrace the
(₹576.91 crore) and (₹196.70 crore).
Banks obtained a complete of 13 preliminary bids from potential patrons however finally just one ultimate provide got here.
Nagarjuna’s 1.59 million tonne plant in Kakinada had confronted points resulting from a gasoline pipeline burst in 2014-15. Fertiliser is a closely regulated sector with important dependence on authorities subsidies and delays in such funds additionally impacted the enterprise.
Bankers anticipate to finish the method this quarter and obtain some provisioning writebacks from the account this quarter.