SBI puts its Essar Steel NPAs worth Rs 15,431 cr on sale
New Delhi: SBI plans to sell over Rs 15,000 crore worth bad loans belonging to Essar Steel to recover its dues from the debt-laden steel maker.
"State Bank of India (SBI) invites expression of interest (EoI) from banks/ARCs/NBFCs/FIs for the proposed sale of its non performing financial assets with total dues of Rs 15,431.44 crore," the bank said in an advertisement.
The lender has put the reserve price for the recovery of bad loans from Essar Steel India at Rs 9,587.64 crore.
SBI said the resolution plan for the recovery of non-performing asset (NPA) has been approved and filed in NCLT Ahmedabad, according to which the minimum recovery to the bank is Rs 11,313.42 crore.
SBI said the reserve price of over Rs 9,587 crore is on the basis of net present value (NPV) of minimum recovery discounted at 18 per cent with a time factor of one year.
SBI has asked the interested ARCs/ banks/ NBFCs/ financial institutions (FIs) that they can conduct due diligence of the asset with immediate effect, after submitting EoI and executing a Non-Disclosure Agreement (NDA) with the bank.
The sale of the NPA account is to happen through e-auction on January 30, as per the bid invite.
SBI further said:"We reserve the right not to go ahead with the proposed sale at any stage, without assigning any reason, subject to the extant RBI guidelines. The decision of the bank in this regard shall be final and binding."
In September last year, SBI had withdrawn the process of sale of debt of Essar Steel to asset reconstruction companies (ARCs) after NCLAT asked lenders of the debt-ridden firm to consider the second round bid of Numetal and mining baron Anil Agarwal-led Vedanta.
Essar Steel, which runs a 10-million-tonne steel mill in Gujarat, owes more than Rs 49,000 crore to over two dozen banks led by SBI and has been under bankruptcy proceedings.
As per the resolution plan submitted by ArcelorMittal, Rs 42,000 crore will be paid to the secured lenders, while an additional Rs 8,000 crore will be pumped into the company as working capital.
ArcelorMittal's offer to take over the bankrupt Essar Steel was accepted by the committee of creditors (CoC).
Essar Steel Asia Holding, the holding company of Essar Steel that was controlled by the Ruias, had also proposed to the CoC, led by SBI, to pay an upfront Rs 54,389 crore to retake the management of Essar Steel.
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