Mumbai: Cerberus Capital and Asset Reconstruction Firm Ltd (ARCIL) have dropped out of the race to amass Sure Financial institution’s ₹48,000 crore dangerous mortgage portfolio, in line with a banker conscious of the matter.
This comes after ARCIL pulled out of the consortium, which lastly ended up not submitting a counter bid.
Sure Financial institution had obtained the counter bid from ARCIL-Cerberus consortium final month below the Swiss Problem methodology after accepting the time period sheet from the very best bidder JC Flowers for ₹11,183 crore.
A Swiss Problem provides rivals a chance to outdo the successful bidder. If there’s such a bid and the successful bidder refuses to match it, the challenger can stroll away with the deal. One of many situations below this methodology was that the counter-offer for the NPA pool might be made solely by an ARC and have to be no less than 5% larger than the anchor bidder to be eligible.
In line with the transaction, the harassed loans can be bought below the 15:85 construction, with ₹1,800 crore, or 15% of the agreed quantity, to be paid upfront in money to Sure Financial institution. The remaining can be paid in safety receipts to be redeemed because the ARC recovers cash from defaulters. Sure financial institution plans to take a position as much as ₹350 crore for a 20 per cent stake in JC Flowers ARC
For Cerberus, that is the second try and bid for Sure financial institution’s NPA portfolio. Mint had reported on 10 February 2022 that Cerberus was in talks with Blackstone-backed Worldwide Asset Reconstruction Firm to collectively purchase Sure Financial institution’s harassed portfolio, however the negotiation remained inconclusive.
Cerberus, which has been a powerful contender for the property, had misplaced out to JC Flowers ARC within the preliminary bidding spherical because it doesn’t personal an ARC.
Emails to Sure financial institution and Cerberus went unanswered.
Sure Financial institution’s publicity to Essel Group, Radius group, Anil Dhirubhai Ambani Group are among the many loans bought to the ARCs.
Final month Sure Financial institution Ltd board had accepted elevating ₹8,898 crore ($1.1 billion) by promoting shares and warrants to personal fairness buyers Carlyle Group and Introduction Worldwide, a transfer that might bolster the personal lender’s capital place.
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Supply: Live Mint