Tue 11/29/2022 06:32 AM
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UPDATE 2: 6:32 a.m. ET 11/29/2022: Ahmedabad-based RARE Asset Reconstruction Ltd.’s INR 1.88 billion ($23 million) bid for INR 6.31 billion non-performing loans (NPLs) of KSK Mahanadi Power Company Ltd. held by state-owned Life Insurance Corporation of India (LIC) is expected to win the Swiss challenge auction due to a lack of counter bids, according to two sources familiar with the matter.

Varde Partners-backed Aditya Birla Asset Reconstruction Co. Ltd. and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. have separately submitted expressions of interest (EoI), as reported.

The process advisor, IDBI Capital Markets & Securities Ltd., did not receive any binding bids from the ARCs that had submitted the EoIs, the sources said.

The deadline to submit binding bids ended on Nov. 24, the sources added.

IDBI Capital and LIC did not respond to requests for comment.

– Dipika Lalwani, Malvika Joshi




UPDATE 1: Aditya Birla ARC, Phoenix ARC Submit EoIs In KSK Mahanadi Swiss Challenge Auction

UPDATE 1: 5:19 a.m. ET 11/11/2022: Varde Partners-backed Aditya Birla Asset Reconstruction Co. Ltd., and Kotak Mahindra Group-sponsored Phoenix ARC Pvt. Ltd. have separately submitted expressions of interest (EoI) in a Swiss challenge auction for INR 6.31 billion ($77.9 million) non-performing loans of KSK Mahanadi Power Company Ltd. held by state-owned Life Insurance Corporation of India, according to two sources familiar.

RARE Asset Reconstruction Ltd.’s INR 1.88 billion bid triggered the Swiss challenge auction, as reported.

The deadline to submit an EoI was extended to Nov. 10 from Nov. 7, according to a notice on IDBI Capital Markets & Securities website.

IDBI Capital Markets & Securities Ltd. has been mandated as a process advisor, as previously reported.

Aditya Birla ARC, Phoenix ARC did not respond to requests for comment.

– Dipika Lalwani




Original Story 9:04 a.m. UTC on Nov. 3, 2022

RARE ARC Offers INR 1.88B for LIC’s INR 6.31B KSK Mahanadi NPLs, Triggering Swiss Challenge Auction; EoI Deadline Nov. 7

Relevant Document:
Auction Notice

Ahmedabad-based RARE Asset Reconstruction Ltd.’s INR 1.88 billion ($22.7 million) bid for INR 6.31 billion non-performing loans (NPLs) of KSK Mahanadi Power Company Ltd. held by state-owned Life Insurance Corporation of India (LIC) has triggered a Swiss challenge auction, according to two sources familiar with the matter.

RARE ARC is in talks with several more lenders to acquire their exposure in KSK Mahanadi, the sources added.

Varde Partners-backed Aditya Birla Asset Reconstruction Co. Ltd., after acquiring INR 38.15 billion loan exposure from State Bank of India at INR 16.22 billion, or 42.51 cents on the dollar, holds claims worth INR 85.48 billion, or 29% of total claims admitted for KSK Mahanadi, as reported.

Union Bank of India also tried to sell INR 20.766 billion outstanding NPLs as of June 30 of KSK Mahanadi Power at a reserve price of INR 9.19 billion or 44.25 cents on the dollar, as reported. As Reorg also reported, the state-owned lender was considering a new auction for the INR 20.766 billion NPLs, as it did not receive any initial bids at the first round of the auction on Aug. 3, due to the high reserve price.

IDBI Capital Markets & Securities Ltd. has been mandated as a process advisor by an insurance company and has invited expressions of interest for the Swiss challenge auction by 4 pm IST on Nov. 7, according to an auction notice on IDBI Capital Markets & Securities website on Nov. 2. The auction is on an all cash basis.

RARE ARC, being the anchor bidder, will hold the right to match the offer from the Swiss challenge auction, the auction notice shows.

The auction will be held on an “as is where is and whatever is” and, “without recourse” basis, according to the auction notice.

In July 2021, LIC called an auction for a portfolio of 16 NPLs aggregating to INR 80.91 billion, which was cancelled due to lower-than-expected bid prices, as reported. LIC later planned to call auctions for the NPLs on an individual basis, but that process did not materialize, as further reported.

LIC did not respond to a request for comment. RARE ARC declined to comment.

--Dipika Lalwani
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