Prudent ARC and a US-based company have bid to take over Punj Lloyd, setting the acquisition process in motion. The US company is reportedly backed by a group of engineering firms.
In February, Atul Punj - the founder of the financially stressed company - offered a settlement to the bankers, hoping to reclaim his construction company. Bankers are now reviewing all the three proposals, reported The Economic Times. Meanwhile, the two contenders are awaiting legal clearance for conforming with bidding rules.
Sources privy to the development have revealed that the two new bids would include both upfront payments and gradual repayment of Punj Llyod dues totalling Rs 13,000 crore.
Moneycontrol could not independently verify the report.
Neither of the new bidders was among the first 13 applicants that showed interest in being a part of the bidding process after the National Company Law Tribunal had submitted an insolvency plea against the Punj Llyod in March 2019.
Notably, Prudent ARC also bid for Jet Airways when it went bankrupt. However, they were disqualified from the bidding process later as they did not possess the minimum net worth needed to invest in the airline.
It was ICICI Bank that dragged Punj Lloyd to the NCLT after it had defaulted on loan repayments worth Rs 800 crore. As per insolvency rules, the existing board of the company was suspended, and a group of creditors began running it on their behalf.
Initially, the construction company could not attract any formal bid and a 60-day extension was sought from the NCLT for the same. Shortly after, Atul Punj offered the settlement to the banks.
If his offer wins, the banks would have to seek withdrawal of the insolvency proceedings against his company. Until the proceedings are lifted his bid cannot be formally accepted, as insolvency rulings don’t allow founders or their kith and kin to acquire bankrupt companies.
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