Jaypee Group-owned Andhra Cements’ lenders received an offer of 43 paise on the rupee from Pridhvi Asset Reconstruction and Securitisation Company (Paras) for part of the company’s loans, two people with knowledge of the matter said.
The offer from Hyderabad-based Paras is supported by BSE-listed Sagar Cements, said one of the two people. The offer comes after the lenders scrapped a plan to sell the company’s assets and decided to sell its debt instead.
Paras offered Rs 434.6 crore for Rs 1,012.3 crore of the outstanding debt held by Edelweiss Asset Reconstruction Company and Karur Vysya Bank as of March 31, 2021, the person said. The two lenders account for about 85 percent of the total loans.
Both the lenders have invited counteroffers under the Swiss Challenge auction scheduled on October 20, according to a notice published on Edelweiss ARC’s website. If the lenders receive an improved counteroffer, then Paras will have the first right to match it, the people said.
NCL Industries and Shree Cement, which bid unsuccessfully for the company’s assets, may probably counter the Paras-Sagar Cement offer, the first person said.
Andhra Cements’ other lenders – Union Bank of India (merged with Andhra Bank) and State Bank of India – have not yet consented to sell their debt in the Swiss Challenge auction, the people said.
Edelweiss ARC, Paras and Sagar Cements did not immediately respond to queries seeking comment on the matter.
Of the Rs 1,012.3 crore of loans on sale, the share of Edelweiss ARC is Rs 922.3 crore and that of Karur Vysya Bank is Rs 90 crore, according to the notice.
Share of Sagar Cements closed at Rs 301.50 on the BSE on September 29. NCL Industries ended at Rs 220.50 and Shree Cement at Rs 29,254.05.
Bids by NCL Industries and Hyderabad-based Sagar Cements for assets of Andhra Cements in the recent debt resolution process by the lenders were rejected, as reported by Moneycontrol.com
Although the lenders received 15 expressions of interest for the two cement plants on offer, only these two companies made offers by mid-September, of which one was non-binding and the other was for the enterprise. This prompted the lenders to relaunch the debt resolution process and invite bids for their loans instead of the company’s assets.
Sagar Cements, promoted by S Veera Reddy, has three cement plants in Andhra Pradesh and one in Madhya Pradesh with an installed production capacity of 5.7 million tonnes per annum, according to the company’s website. The company acquired Satguru Cement and Jaipur Cements over the past three years.