Bad bank looks to buy 18 stressed accounts. All you need to know
In what could have a substantial positive impact on the banking sector, the Indian government-backed bad bank is set to acquire 18 distressed accounts amounting to just under Rs 40,000 crore.
The National Asset Reconstruction Co of India Ltd (NARCL) has decided to acquire the bad loans following directions from the finance ministry, according to a report in The Economic Times.
So, what exactly has the NARCL done so far?
The NARCL informed lenders on September 16 that it has created two lists – Phase 1 comprising eight accounts with debt of Rs 16,744 and Phase 2 having 10 accounts with a debt of Rs 18,177, the report said.
Which accounts have been taken over by the NARCL?
As per the ET report citing sources, Jaypee Infrastructure, Meenakshi Energy, Mittal Corp, Rainbow Papers and Consolidated Construction Company are among the eight companies in phase one. Coastal Energen, Rolta and McNally Bharat Engineering are part of phase two.
Has the bad bank hired any consultants for the job?
Yes. Sources told ET that the government-owned ARC has hired EY, PwC, Alvarez and Marsal, KPMG, Grant Thornton as consultants to conduct due diligence, before finalising bids for these 18 accounts.
Are any more lists coming?
Reportedly, a third list will shortly be issued, comprising the twin Srei companies, a few Future Group companies and VOVL, the oil and gas exploration company of Videocon Industries. The NARCL, bad bank promoted by the government, aims to consolidate bad loans from lenders and resolve them through a debt management firm.
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