Union Bank Receives Binding Bids Worth Rs 520 Cr On Four Stressed Assets
Union Bank of India has received bids for four distressed loans worth over Rs 520 crore from ACCIL Corporation, Jaypee Healthcare, SDB Developers and Gammon India. The bids came in at less than half the value of the loans, and the payment was on a 100 per cent upfront cash basis to CFM ARC, ARCIL, JC Flowers, and Omkara ARC.
JC Flowers Asset Reconstruction Company has emerged as the frontrunner to acquire the distressed loans of Jaypee Healthcare, while Omkara ARC is in the running to acquire Gammon India loans from Union Bank of India. The government bank received binding bids for four stressed accounts with outstanding loans of Rs 525 crore, resulting in 34 per cent to 90 per cent recovery.
The bank will hold a Swiss auction process on February 21 and accept a minimum bid at a 5 per cent mark-up to the base bid, according to a bank document.
ACCIL Corporation has received the highest offer among the four loans. The bank received a binding bid from Asset Reconstruction Company India for 103 crore against the total debt of 115 crore, resulting in a recovery of over 90 per cent. For Jaypee Healthcare, JC Flowers ARC offered 82 per cent recovery on the debt of Rs 68 crore. Similarly, CFM ARC has offered 80 per cent to buy Rs 86 crore of SDB Developers loans. The lowest bid is offered for Gammon India, where Omkara ARC has offered to pay 34 per cent for the 252 crore debt.
All binding bids were set at a reserve price by the lender. These are mostly loans that have not turned bad over the last several years. SDB Developers turned bad in 2019, and the bank has been trying to sell these bad loans for the last several quarters. Gammon India is a legacy NPA that turned bad in 2013. ACCIL Corporation turned bad in 2016. These four loans are part of the 16 accounts that the bank put on sale last month and allowed potential buyers to bid on individual accounts or opt for the entire portfolio.
As of 31 December 2023, Union Bank of India reported a gross NPA of 4.83 per cent, a significant improvement from 7.93 per cent in the corresponding quarter of the previous year.
