REC looking to sell its bad loans worth Rs 2,848 crore in Corporate Power Ltd

New Delhi: REC Limited, a state-owned NBFC is looking to sell its non-performing assets (NPAs) or bad loans worth Rs 2,848 crore in Corporate Power Ltd (CPL).

The company has invited counterbids via a Swiss challenge auction, initiated by an anchor bid of Rs 58.65 crore.

The auction would result in a recovery of just 2.05 per cent for the lender, or a haircut of almost 98 per cent, in case no counter bids are received.

Corporate Power Ltd is a Special Purpose Vehicle (SPV) of Abhijeet Group exclusively incorporated in the year 2006 for the Power Venture in Latehar district of Jharkhand.

The project is divided into 2 Phases, each comprising of 540 MW (2units x 270 MW) Power Plant. Plant construction was started in 2009. Construction activities were suspended in September 2012. Currently, CPL is under liquidation.

REC has invited expressions of interest (EoIs) from entities interested in acquiring the bad loans by January 28.

Counterbids for the same must be submitted by February 2, with the Swiss challenge auction scheduled for February 5.