Omkara ARC, NARCL are frontrunners in SASF’s Rs 6,151 crore NPA sale

Non-Performing Assets

Omkara Asset Reconstruction Pvt Ltd and National Asset Reconstruction Company Ltd (NARCL) are emerging as frontrunners to acquire non-performing loan accounts worth Rs 6,151.16 crore, which have been put on a block for sale by the Stressed Assets Stabilisation Fund (SASF), people aware of the development told Moneycontrol.

SASF has released the final list of bidders who have submitted expressions of interest for these. This list contains the names of 14 asset reconstruction companies, including Omkara ARC and NARCL.

On July 13, SASF invited expressions of interest to sell 239 non-performing loan accounts worth Rs 6,151.16 crore. The company set a reserve price of Rs 642 crore, as per release.

Of the total 239 accounts, 81 cases include tangible securities and guarantees with a gross principal outstanding of Rs 2,179.51 crore and the remaining 158 cases include guarantees and claims with a gross principal outstanding of Rs 3,971.65 crore.

SASF has appointed Ernst & Young LLP as the process advisor for assisting with the proposed assignment or sale of the NPA Portfolio.

The last date for submission of expression of interest given by the company was July 16.

As per the release, the process of the sale of NPAs will take place in two processes; the first one will carry the expression of interest submission and shortlisting of prospective bidders, and the second one will carry due diligence followed by the submission of bids by prospective bidders.

SASF was constituted by the Govt of India pursuant to a provision in the Union Budget 2004-05, a Special Purpose Vehicle (SPV) Trust for acquiring stressed and non-performing assets of the erstwhile Industrial Development Bank of India (IDBI).

SASF has been accorded the status of Financial Institution to take advantage of provision of the Recovery of Debts due to Banks and Financial Institutions, 1993 by approaching Debt Recovery Tribunal (DRT) as well as Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, Corporate Debt Restructuring (CDR) mechanism for resolution of the assets acquired along with proceedings under Insolvency and Bankruptcy Code, 2016 (IBC) through NCLT.