A consortium of lenders led by IDBI Bank on Monday sought expressions of interest for acquiring its Rs 804-crore exposure in a road asset created by IVRCL. The banks want to sell IVRCL Chengapalli Tollways (ICTL) to asset reconstruction businesses or other economic institutions in line with regulatory recommendations.
IVRCL was amongst the businesses named by the Reserve Bank of India (RBI) in 2017 in its second list of poor assets to be resolved below the insolvency code. The organization has considering the fact that gone into liquidation. The road asset is becoming provided at a reserve cost of `500 crore in an all-money deal, implying a maximum haircut of 38%. The consortium has sanctioned loans worth Rs 862 crore to the asset. The other lenders in the consortium are Karur Vysya Bank, Union Bank of India, State Bank of India and Bank of Baroda.
Bidders interested in obtaining the asset will have to send in expressions of interest (EoIs) by September 9 and the last date for submission of bids is September 27. Thereafter, there will be an inter-se bidding amongst the prime 3 bidders on September 28. “Once the deal is finalised, the assignment deed and other legal formalities will be completed in the shortest possible time as mutually agreed upon,” IDBI Bank mentioned in a notice.
Recoveries from massive poor assets have been an critical element behind some banks turning a profit in the June quarter. In Q1FY22, IDBI Bank reported a 318% year-on-year jump in its net profit, aided by a recovery from the Kingfisher Airlines account. The total recovery from the account stood at Rs 733 crore.
IDBI Bank MD & CEO Rakesh Sharma mentioned in July that the bank will be capable to minimize its gross non-performing asset (NPA) ratio by 4-5% by means of development in the advances or the denominator. “Now the government has also come out with the National Asset Reconstruction Company Ltd. (NARCL) and we may transfer some accounts there as well. Once the NARCL becomes functional, some assets will be transferred and that would further reduce the gross NPA by another 5-6%,” mentioned Sharma. The gross NPA ratio stood at 22.71% at the finish of June.
The lender plans to transfer a total of Rs 11,000-12,000 crore of advances to the NARCL, of which live accounts will be to the tune of Rs 7,000-8,000 crore, with the rest becoming written-off accounts.