JC Flowers Asset Reconstruction has emerged the highest bidder, with its bid of ₹410 crore, for acquiring the debt of Hyderabad-based Sathavahana Ispat.
A consortium comprising Canara Bank, State Bank of India (SBI), Union Bank and IFCI had called for bids for sale of the debt. Sathavahana Ispat owes them over ₹1,000 crore and the debt is classified as non-performing assets (NPA) in the books of the lenders for more than three years, a note said.
Four bids were received by the consortium. The other bids were from Maximus ARC for ₹380 crore; CFM ARC for ₹370 crore; and Welspun for ₹360 crore. Sathavahana Ispat is primarily engaged in manufacturing ductile iron pipes and pig iron. It also has a metallurgical coke plant.
Following evaluation of all four bids, the consortium formally selected J.C. Flowers as the H1 bidder. As next steps, and in accordance with due process, it is proposed to run a Swiss challenge process to maximise value (optimise the offer and discover better price for the lenders).
The lenders are trying to maximise the recovery for themselves by taking advantage of the recent surge in steel prices. Steel prices are currently at an all time high, the note said.
Citing RBI database and IFCI Annual report, the note said among major public sector banks, SBI has the highest amount of NPAs at over ₹1.49 lakh crore, Canara Bank has NPAs of ₹37,041 crore and Union Bank of India is at ₹49,085 crore. IFCI has gross NPAs of ₹7,774 crore.
