Reorg Asia Special Coverage
UPDATE 8: ARCs in Talks With Jammu & Kashmir Bank, Punjab National Bank, Union Bank of India for Srinagar Banihal Expressway NPLs at ~62C to 65C on Dollar
Fri 02/18/2022 03:33 AM
UPDATE 8: 3:33 a.m. ET 2/18/2022: Asset reconstruction companies (ARCs) are in talks with lenders to Srinagar Banihal Expressway Ltd. - including Jammu & Kashmir Bank, Punjab National Bank and Union Bank of India - ahead of potential auctions for the company’s non-performing loans which are expected to kick off as soon as next week, said three sources with knowledge.
Jammu & Kashmir Bank is expected to invite bids for its NPLs by next week or the following week. Its outstanding exposure to SBEL is around INR 2 billion ($26.5 million), two of the above sources said.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. ARCIL already holds 27.4% of Srinagar Banihal’s total debt after acquiring NPLs at auction from Indian Overseas Bank, while Apollo Global-backed Arcion Revitalization Pvt. Ltd., holds a 26% share of the company’s total debt, as reported.
The ARCs are eyeing bids of around 62 cents to 65 cents on the dollar for the NPLs, but the lenders have varying expectations on pricing, the sources said.
Both Punjab National Bank and Union Bank of India are looking at higher recovery values for their Srinagar Banihal NPLs of around 80 cents to 85 cents on the dollar, two of the sources said.
Previously, Union Bank of India on Dec. 1 invited bids to sell INR 1 billion NPLs of Srinigar Banihal at a reserve price of INR 900 million, or 90 cents on the dollar, as reported. The auction was cancelled due to a lack of bids because of the high reserve price, the sources said.
Punjab National Bank has around INR 1.08 billion principal outstanding NPL exposure to Srinagar Banihal, as reported.
The debtor has total debt of INR 14.19 billion, as reported. In July, Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., backed by Deutsche Bank and Cerberus, won the bidding for Bank of India’s auction of INR 2.03 billion Srinigar Banihal NPLs, as further reported.
Jammu & Kashmir Bank, Punjab National Bank and Union Bank of India did not respond to requests for comment.
– Poonam Bansal, Dipika Lalwani
UPDATE 7: ARCIL Likely to Win IOB’s INR 2B NPL Auction of Srinagar Banihal Expressway; Punjab National Bank to Invite Bids to Sell INR 1.08B Exposure
UPDATE 7: 4:43 a.m. ET 9/24/2021: Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is likely to win state-owned Indian Overseas Bank’s (IOB) INR 2 billion ($27.1 million) non-performing loans auction of Srinagar Banihal Expressway Ltd. (SBEL), on lack of counter bids, according to three sources familiar with the matter.
Apollo Global-backed ARCION Revitalization Pvt. Ltd., the largest debt holder in SBEL with a 26% share, is also not expected to exercise its right of first refusal, two of the above sources said. Official confirmation is expected to come today, Sept. 24, the sources said.
Varde Partners-backed Aditya Birla Asset Reconstruction Company Ltd. and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., were among the ARCs to submit EOIs, but they did not submit a binding bid, one of the above sources and a fourth source said.
ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, and winning the IOB auction would increase its stake to 27.4%, Reorg’s calculations show.
Separately, Punjab National Bank is expected to invite bids for around INR 1.08 billion principal outstanding non-performing loans for SBEL soon, three of the sources said.
IOB, Punjab National Bank, ARCIL did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 6: IOB Receives EoIs From Aditya Birla ARC, Phoenix ARC for INR 2B NPL Auction of Srinagar Banihal Expressway
UPDATE 6: 5:39 a.m. ET 9/20/2021: State-owned Indian Overseas Bank (IOB) has received expressions of interest from Varde Partners-backed Aditya Birla Asset Reconstruction Company Ltd. and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., among seven ARCs for Srinagar Banihal Expressway Ltd’s INR 2 billion ($27.1 million) non-performing loans auction, according to two sources familiar with the matter.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is the anchor bidder for the NPL sale, as reported. IOB has set a reserve price of INR 1.30 billion or 65 cents on the dollar, as further reported.
IOB, Aditya Birla ARC, Phoenix ARC did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 5: Indian Overseas Bank Invites EoIs For Srinagar Banihal Expressway INR 2B NPLs Under Swiss Challenge
UPDATE 5: 7:13 a.m. ET 9/1/2021: State-owned Indian Overseas Bank (IOB) has invited expression of interest (EoIs) for Srinagar Banihal Expressway Ltd’s INR 2 billion ($27.4 million) non-performing loans outstanding as on June 30, under the Swiss challenge method, according to the auction notice on the lender’s website on Aug. 31.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is the anchor bidder for the NPL sale, as reported. IOB has set a reserve price of INR 1.30 billion or 65 cents on the dollar, the auction notice shows.
IOB has also called EOIs for sale of a portfolio of unsecured education loans worth INR 5.04 billion outstanding as on Aug. 16 at a reserve price of INR 2.016 billion through an open auction, the same notice shows.
The deadline to submit EoIs for both auctions is Sept. 8, while the due diligence will commence from Sept. 2 and will end on Sept. 16, the notice shows. E-bidding will be conducted on Sept. 20, the notice states.
The auction is held on full cash basis and on an “as is where is” and “as is what is” basis without any recourse to the bank, according to the auction notice.
Details of Srinagar Banihal NPLs, portfolio of unsecured education loans is below.
UPDATE 4: Indian Overseas Bank Expected to Invite Bids For Srinagar Banihal Expressway INR 1.42B NPLs This Week; ARCIL Likely Anchor Bidder
UPDATE 4: 7:26 a.m. ET 8/30/2021: State-Owned Indian Overseas Bank is expected to invite bids for the INR 1.42 billion ($19.2 million) outstanding non-performing loans (NPLs) of Srinagar Banihal Expressway Ltd. (SBEL) this week, two sources familiar with the matter said.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is likely to be the anchor bidder for the NPL sale, the sources said. ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, as reported.
In July, Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd’s bid backed by Deutsche Bank and Cerberus, won Bank of India’s auction of INR 2.03 billion NPLs for SBEL at a reserve price of INR 1.24 billion or 61.08 cents to the dollar, as reported. Phoenix ARC increased its bid from INR 1.21 billion earlier or 59.61 cents on the dollar, as further reported.
That auction process was briefly stalled after ARCIL’s last-minute INR 1.24 billion bid, as reported.
Indian Overseas Bank, ARCIL did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 3: Phoenix ARC Wins Srinagar Banihal Expressway NPL Auction at INR 1.24B Bid
UPDATE 3: 7:41 a.m. ET 7/28/2021: Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. wins Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) for Srinagar Banihal Expressway Ltd. (SBEL), said two sources with knowledge.
The bid was increased to INR 1.24 billion from INR 1.21 billion earlier, the sources said. Phoenix ARC’s bid is backed by Deutsche Bank and Cerberus, as previously reported.
The auction process was stalled after Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) last-minute INR 1.24 billion bid, as reported.
Bank of India, Phoenix ARC did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 2: Srinagar Banihal Expressway NPL Auction at Stalemate as ARCIL’s Last-Minute INR 1.24B Bid Tops Phoenix ARC
UPDATE 2: 12:51 a.m. ET 7/15/2021: Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) for Srinagar Banihal Expressway Ltd. (SBEL) is stalled, after Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) submitted a higher bid than Phoenix ARC, but after the auction deadline, said two sources with direct knowledge.
Phoenix ARC, backed by Deutsche Bank and Cerberus, had been the sole bidder at INR 1.22 billion but ARCIL’s last-minute INR 1.24 billion bid has not been accepted by Bank of India - which has put the debt up for auction - as it came after the June 15 deadline, said the sources.
The contest is over gaining a potential controlling stake in the asset, the sources said.
Bank of India’s loans account for 14.3% of SBEL’s total debt of INR 14.19 billion, and if Phoenix ARC wins the auction, Deutsche Bank will gain control of around 40.3% of SBEL’s debt, according to Reorg’s calculations.
ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, and winning the Bank of India auction would increase its stake to 27.9%, Reorg’s calculations show.
If a securitization company (SC) or reconstruction company (RC) holds over 25% of the debt of the corporate debtor, then the SC, RC gets the first right of refusal for accounts under the Swiss challenge method as per RBI guidelines, according to the bid document.
After its bid was knocked back, ARCIL has written a letter to the state-owned lender asking for its bid to be accepted to maximize the recovery value, according to one of the sources and a separate source with direct knowledge.
However, Bank of India has neither replied to ARCIL’s letter nor declared the outcome of the auction, which was expected at the end of June, according to the first and third source. The state-owned lender is awaiting board approval to proceed, the second and third source said.
The final bid remains valid for a period of 30 days from the date of submission (June 15), according to the bid document. However, Bank of India can seek an extension of the validity for such period as may be determined by the lender at its sole discretion, the bid document also shows.
Apollo Global-backed ARCION Revitalization Pvt. Ltd., the largest debt holder in SBEL with a 26% share, did not exercise its right of first refusal, all three sources said. ARCION’s loan holds are also backed by Deutsche Bank and Cerberus, as previously reported.
ARCIL declined to comment. Bank of India did not respond to requests for comment.
--Dipika Lalwani
UPDATE 1: Phoenix ARC Sole Bidder for Bank of India’s INR 2.03B Srinagar Banihal Expressway NPL Auction, Backed by Deutsche Bank, Cerberus; Apollo’s ARCION Holds ROFR
UPDATE 1: 9:04 a.m. ET 6/18/2021: Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. is the only bidder for Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) of Srinagar Banihal Expressway Ltd. (SBEL), entering a bid at the reserve price of INR 1.22 billion, or 60 cents on the dollar, said three sources with knowledge of the matter.
Phoenix ARC’s bid is backed by Deutsche Bank and Cerberus, two of the three sources said.
Apollo Global-backed ARCION Revitalization Pvt. Ltd. is the largest debt holder in SBEL with a 26% share, and holds a right-of-first-refusal (ROFR), as reported. ARCION has the option to either match or improve on Phoenix ARC’s offer, or waive its ROFR, both the sources explained.
ARCION’s loan holds are also backed by Deutsche Bank and Cerberus, the two sources added.
In April, Avenue Capital-backed Asset Reconstruction Company (India) Ltd. won the auction for ICICI Bank’s INR 1.93 billion NPLs of SBEL at 55 cents on the dollar, as further reported.
A Bank of India committee will meet on June 25 to decide the winner of the auction, two of the sources said.
Deutsche Bank declined to comment. Cerberus, Phoenix ARC and Bank of India did not respond to requests for comments.
-- Dipika Lalwani, Rajhkumar K Shaaw
Original Story 6:46 a.m. UTC on May 27, 2021
Bank of Baroda, Punjab National Bank, Indian Overseas Bank, Jammu & Kashmir Bank in Talks With Investors to Gauge Interest for Srinagar Banihal Expressway NPL Sale; Bank of India Announces Auction for INR 2B Hold at 60 Cents
Relevant Document:
BoI Auction Notice
State-run lenders of Srinagar Banihal Expressway Ltd. (SBEL), including Bank of Baroda, Punjab National Bank, Indian Overseas Bank and Jammu & Kashmir Bank are in discussion with asset reconstruction companies and distressed debt investors to gauge interest to sell their non-performing loan (NPLs) in the special purpose vehicle before announcing an auction, said two sources with knowledge.
State-run Bank of India, which was also discussing a potential NPL sale with investors, announced an auction of its INR 2.03 billion ($28 million) outstanding in SBEL with a reserve price of INR 1.22 billion, or 60 cents on the dollar, according to a May 25 notice published by the lender. Auctions by the other state-run lenders are expected to follow soon, the sources said.
The last date to submit a final bid for the Bank of India auction is June 15, according to the notice.
The move by the state-run lenders follows after private lender ICICI Bank sold its INR 1.93 billion NPL hold in SBEL to Avenue Capital-backed Asset Reconstruction Company (India) Ltd. at 55 cents on the dollar in an auction that closed last month, as reported. A higher reserve price than last closed deal shows investor appetite for sectors backed by physical assets such as roads, cements and steel, as highlighted in a May 20 webinar organized by Reorg.
Apollo Global-backed ARCION Revitalization Pvt. Ltd. is the largest debt holder in SBEL with a 26% share and it will have the right of first refusal to any NPL sale of SBEL, as further reported.
List of NPLs announced by Bank of India, according to auction notice, is below.
In 2010, Ramky Infrastructure-backed SBEL won a tender from the National Highways Authority of India (NHAI) to design, build, finance, operate and transfer a four-lane 67.7km expressway between the cities of Srinagar and Banihal in the state of Jammu & Kashmir , according to an April 2018 BSE Ltd. filing by the company.
The project received a provisional completion certificate after a four-year delay in March 2018, which entitled SBEL to receive annuity payments from the NHAI, the statement said. The project has a 20-year concession period, according to an official database of infrastructure projects in India.
Bank of Baroda, Punjab National Bank, Indian Overseas Bank and Jammu & Kashmir Bank did not respond to requests for comments.
See Reorg’s coverage of India Loan Auctions HERE.
-- Rajhkumar K Shaaw
Jammu & Kashmir Bank is expected to invite bids for its NPLs by next week or the following week. Its outstanding exposure to SBEL is around INR 2 billion ($26.5 million), two of the above sources said.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. ARCIL already holds 27.4% of Srinagar Banihal’s total debt after acquiring NPLs at auction from Indian Overseas Bank, while Apollo Global-backed Arcion Revitalization Pvt. Ltd., holds a 26% share of the company’s total debt, as reported.
The ARCs are eyeing bids of around 62 cents to 65 cents on the dollar for the NPLs, but the lenders have varying expectations on pricing, the sources said.
Both Punjab National Bank and Union Bank of India are looking at higher recovery values for their Srinagar Banihal NPLs of around 80 cents to 85 cents on the dollar, two of the sources said.
Previously, Union Bank of India on Dec. 1 invited bids to sell INR 1 billion NPLs of Srinigar Banihal at a reserve price of INR 900 million, or 90 cents on the dollar, as reported. The auction was cancelled due to a lack of bids because of the high reserve price, the sources said.
Punjab National Bank has around INR 1.08 billion principal outstanding NPL exposure to Srinagar Banihal, as reported.
The debtor has total debt of INR 14.19 billion, as reported. In July, Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., backed by Deutsche Bank and Cerberus, won the bidding for Bank of India’s auction of INR 2.03 billion Srinigar Banihal NPLs, as further reported.
Jammu & Kashmir Bank, Punjab National Bank and Union Bank of India did not respond to requests for comment.
– Poonam Bansal, Dipika Lalwani
UPDATE 7: ARCIL Likely to Win IOB’s INR 2B NPL Auction of Srinagar Banihal Expressway; Punjab National Bank to Invite Bids to Sell INR 1.08B Exposure
UPDATE 7: 4:43 a.m. ET 9/24/2021: Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is likely to win state-owned Indian Overseas Bank’s (IOB) INR 2 billion ($27.1 million) non-performing loans auction of Srinagar Banihal Expressway Ltd. (SBEL), on lack of counter bids, according to three sources familiar with the matter.
Apollo Global-backed ARCION Revitalization Pvt. Ltd., the largest debt holder in SBEL with a 26% share, is also not expected to exercise its right of first refusal, two of the above sources said. Official confirmation is expected to come today, Sept. 24, the sources said.
Varde Partners-backed Aditya Birla Asset Reconstruction Company Ltd. and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., were among the ARCs to submit EOIs, but they did not submit a binding bid, one of the above sources and a fourth source said.
ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, and winning the IOB auction would increase its stake to 27.4%, Reorg’s calculations show.
Separately, Punjab National Bank is expected to invite bids for around INR 1.08 billion principal outstanding non-performing loans for SBEL soon, three of the sources said.
IOB, Punjab National Bank, ARCIL did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 6: IOB Receives EoIs From Aditya Birla ARC, Phoenix ARC for INR 2B NPL Auction of Srinagar Banihal Expressway
UPDATE 6: 5:39 a.m. ET 9/20/2021: State-owned Indian Overseas Bank (IOB) has received expressions of interest from Varde Partners-backed Aditya Birla Asset Reconstruction Company Ltd. and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd., among seven ARCs for Srinagar Banihal Expressway Ltd’s INR 2 billion ($27.1 million) non-performing loans auction, according to two sources familiar with the matter.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is the anchor bidder for the NPL sale, as reported. IOB has set a reserve price of INR 1.30 billion or 65 cents on the dollar, as further reported.
IOB, Aditya Birla ARC, Phoenix ARC did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 5: Indian Overseas Bank Invites EoIs For Srinagar Banihal Expressway INR 2B NPLs Under Swiss Challenge
UPDATE 5: 7:13 a.m. ET 9/1/2021: State-owned Indian Overseas Bank (IOB) has invited expression of interest (EoIs) for Srinagar Banihal Expressway Ltd’s INR 2 billion ($27.4 million) non-performing loans outstanding as on June 30, under the Swiss challenge method, according to the auction notice on the lender’s website on Aug. 31.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is the anchor bidder for the NPL sale, as reported. IOB has set a reserve price of INR 1.30 billion or 65 cents on the dollar, the auction notice shows.
IOB has also called EOIs for sale of a portfolio of unsecured education loans worth INR 5.04 billion outstanding as on Aug. 16 at a reserve price of INR 2.016 billion through an open auction, the same notice shows.
The deadline to submit EoIs for both auctions is Sept. 8, while the due diligence will commence from Sept. 2 and will end on Sept. 16, the notice shows. E-bidding will be conducted on Sept. 20, the notice states.
The auction is held on full cash basis and on an “as is where is” and “as is what is” basis without any recourse to the bank, according to the auction notice.
Details of Srinagar Banihal NPLs, portfolio of unsecured education loans is below.
UPDATE 4: Indian Overseas Bank Expected to Invite Bids For Srinagar Banihal Expressway INR 1.42B NPLs This Week; ARCIL Likely Anchor Bidder
UPDATE 4: 7:26 a.m. ET 8/30/2021: State-Owned Indian Overseas Bank is expected to invite bids for the INR 1.42 billion ($19.2 million) outstanding non-performing loans (NPLs) of Srinagar Banihal Expressway Ltd. (SBEL) this week, two sources familiar with the matter said.
Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) is likely to be the anchor bidder for the NPL sale, the sources said. ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, as reported.
In July, Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd’s bid backed by Deutsche Bank and Cerberus, won Bank of India’s auction of INR 2.03 billion NPLs for SBEL at a reserve price of INR 1.24 billion or 61.08 cents to the dollar, as reported. Phoenix ARC increased its bid from INR 1.21 billion earlier or 59.61 cents on the dollar, as further reported.
That auction process was briefly stalled after ARCIL’s last-minute INR 1.24 billion bid, as reported.
Indian Overseas Bank, ARCIL did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 3: Phoenix ARC Wins Srinagar Banihal Expressway NPL Auction at INR 1.24B Bid
UPDATE 3: 7:41 a.m. ET 7/28/2021: Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. wins Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) for Srinagar Banihal Expressway Ltd. (SBEL), said two sources with knowledge.
The bid was increased to INR 1.24 billion from INR 1.21 billion earlier, the sources said. Phoenix ARC’s bid is backed by Deutsche Bank and Cerberus, as previously reported.
The auction process was stalled after Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) last-minute INR 1.24 billion bid, as reported.
Bank of India, Phoenix ARC did not respond to requests for comment.
-- Dipika Lalwani
UPDATE 2: Srinagar Banihal Expressway NPL Auction at Stalemate as ARCIL’s Last-Minute INR 1.24B Bid Tops Phoenix ARC
UPDATE 2: 12:51 a.m. ET 7/15/2021: Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) for Srinagar Banihal Expressway Ltd. (SBEL) is stalled, after Avenue Capital-backed Asset Reconstruction Company (India) Ltd. (ARCIL) submitted a higher bid than Phoenix ARC, but after the auction deadline, said two sources with direct knowledge.
Phoenix ARC, backed by Deutsche Bank and Cerberus, had been the sole bidder at INR 1.22 billion but ARCIL’s last-minute INR 1.24 billion bid has not been accepted by Bank of India - which has put the debt up for auction - as it came after the June 15 deadline, said the sources.
The contest is over gaining a potential controlling stake in the asset, the sources said.
Bank of India’s loans account for 14.3% of SBEL’s total debt of INR 14.19 billion, and if Phoenix ARC wins the auction, Deutsche Bank will gain control of around 40.3% of SBEL’s debt, according to Reorg’s calculations.
ARCIL holds 13.6% of SBEL’s total debt after acquiring ICICI Bank’s INR 1.93 billion NPLs in April, and winning the Bank of India auction would increase its stake to 27.9%, Reorg’s calculations show.
If a securitization company (SC) or reconstruction company (RC) holds over 25% of the debt of the corporate debtor, then the SC, RC gets the first right of refusal for accounts under the Swiss challenge method as per RBI guidelines, according to the bid document.
After its bid was knocked back, ARCIL has written a letter to the state-owned lender asking for its bid to be accepted to maximize the recovery value, according to one of the sources and a separate source with direct knowledge.
However, Bank of India has neither replied to ARCIL’s letter nor declared the outcome of the auction, which was expected at the end of June, according to the first and third source. The state-owned lender is awaiting board approval to proceed, the second and third source said.
The final bid remains valid for a period of 30 days from the date of submission (June 15), according to the bid document. However, Bank of India can seek an extension of the validity for such period as may be determined by the lender at its sole discretion, the bid document also shows.
Apollo Global-backed ARCION Revitalization Pvt. Ltd., the largest debt holder in SBEL with a 26% share, did not exercise its right of first refusal, all three sources said. ARCION’s loan holds are also backed by Deutsche Bank and Cerberus, as previously reported.
ARCIL declined to comment. Bank of India did not respond to requests for comment.
--Dipika Lalwani
UPDATE 1: Phoenix ARC Sole Bidder for Bank of India’s INR 2.03B Srinagar Banihal Expressway NPL Auction, Backed by Deutsche Bank, Cerberus; Apollo’s ARCION Holds ROFR
UPDATE 1: 9:04 a.m. ET 6/18/2021: Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. is the only bidder for Bank of India’s auction of INR 2.03 billion ($27.5 million) non-performing loans (NPLs) of Srinagar Banihal Expressway Ltd. (SBEL), entering a bid at the reserve price of INR 1.22 billion, or 60 cents on the dollar, said three sources with knowledge of the matter.
Phoenix ARC’s bid is backed by Deutsche Bank and Cerberus, two of the three sources said.
Apollo Global-backed ARCION Revitalization Pvt. Ltd. is the largest debt holder in SBEL with a 26% share, and holds a right-of-first-refusal (ROFR), as reported. ARCION has the option to either match or improve on Phoenix ARC’s offer, or waive its ROFR, both the sources explained.
ARCION’s loan holds are also backed by Deutsche Bank and Cerberus, the two sources added.
In April, Avenue Capital-backed Asset Reconstruction Company (India) Ltd. won the auction for ICICI Bank’s INR 1.93 billion NPLs of SBEL at 55 cents on the dollar, as further reported.
A Bank of India committee will meet on June 25 to decide the winner of the auction, two of the sources said.
Deutsche Bank declined to comment. Cerberus, Phoenix ARC and Bank of India did not respond to requests for comments.
-- Dipika Lalwani, Rajhkumar K Shaaw
Original Story 6:46 a.m. UTC on May 27, 2021
Bank of Baroda, Punjab National Bank, Indian Overseas Bank, Jammu & Kashmir Bank in Talks With Investors to Gauge Interest for Srinagar Banihal Expressway NPL Sale; Bank of India Announces Auction for INR 2B Hold at 60 Cents
Relevant Document:
BoI Auction Notice
State-run lenders of Srinagar Banihal Expressway Ltd. (SBEL), including Bank of Baroda, Punjab National Bank, Indian Overseas Bank and Jammu & Kashmir Bank are in discussion with asset reconstruction companies and distressed debt investors to gauge interest to sell their non-performing loan (NPLs) in the special purpose vehicle before announcing an auction, said two sources with knowledge.
State-run Bank of India, which was also discussing a potential NPL sale with investors, announced an auction of its INR 2.03 billion ($28 million) outstanding in SBEL with a reserve price of INR 1.22 billion, or 60 cents on the dollar, according to a May 25 notice published by the lender. Auctions by the other state-run lenders are expected to follow soon, the sources said.
The last date to submit a final bid for the Bank of India auction is June 15, according to the notice.
The move by the state-run lenders follows after private lender ICICI Bank sold its INR 1.93 billion NPL hold in SBEL to Avenue Capital-backed Asset Reconstruction Company (India) Ltd. at 55 cents on the dollar in an auction that closed last month, as reported. A higher reserve price than last closed deal shows investor appetite for sectors backed by physical assets such as roads, cements and steel, as highlighted in a May 20 webinar organized by Reorg.
Apollo Global-backed ARCION Revitalization Pvt. Ltd. is the largest debt holder in SBEL with a 26% share and it will have the right of first refusal to any NPL sale of SBEL, as further reported.
List of NPLs announced by Bank of India, according to auction notice, is below.
In 2010, Ramky Infrastructure-backed SBEL won a tender from the National Highways Authority of India (NHAI) to design, build, finance, operate and transfer a four-lane 67.7km expressway between the cities of Srinagar and Banihal in the state of Jammu & Kashmir , according to an April 2018 BSE Ltd. filing by the company.
The project received a provisional completion certificate after a four-year delay in March 2018, which entitled SBEL to receive annuity payments from the NHAI, the statement said. The project has a 20-year concession period, according to an official database of infrastructure projects in India.
Bank of Baroda, Punjab National Bank, Indian Overseas Bank and Jammu & Kashmir Bank did not respond to requests for comments.
See Reorg’s coverage of India Loan Auctions HERE.
-- Rajhkumar K Shaaw
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