NARCL gives binding offers for two highway assets and a steel company

Government-promoted National Asset Reconstruction Company has given lenders binding offers to acquire loans of SEW LSY Highways, Haridwar Highways Project and Kamachi Steel, said people aware of the development.

Separately, NARCL is set to acquire loans of SPML Infra and Dharani Sugars following an uncontested Swiss auction, the people said.

If lenders approve a binding offer for the two road projects and the steel company, it will be followed by a Swiss challenge auction. NARCL's offer for the three companies is less than 10% of their outstanding dues, one of the persons said.

The state-backed bad bank's binding offer of ₹405 crore for SPML Infra, an engineering, procuring and construction (EPC) company, triggered a Swiss challenge auction schedule on June 6. NARCL is preparing to acquire the loan in cash and security receipts since lenders did not receive any counteroffer. Lenders will recover 33% of the dues from the sale of the EPC company.

Haridwar Highways Project is a special-purpose vehicle of Era Infra Engineering that won a contract from the National Highways Authority of India to strengthen the 80-km stretch from Muzaffarnagar in Uttar Pradesh to Haridwar in Uttarakhand. The total project cost escalated to ₹1,563 crore, which included loans of about ₹980 crore. In the past, lenders attempted to change the concessionaire but failed to find a replacement.

SEW LSY Highways, a special purpose vehicle promoted by SEW Infrastructure had won a contract for converting two lanes of a 206-kilometre stretch of the Delhi-Saharanpur-Yamunotri highway into four lanes. The company has loans of ₹1,700 crore, but the project was terminated by the Uttar Pradesh State Highways Authority, delaying debt servicing since 2014.

Kamachi Steels is a part of Kamachi Industries, undergoing liquidation under the Insolvency and Bankruptcy Code.

Meanwhile, another Swiss challenge auction of Parenteral Drugs is scheduled on Wednesday following a binding offer of ₹45 crore by NARCL on a loan of ₹112 crore.

In March, NARCL emerged as the winning bidder for the loans of Dharani Sugars and Chemicals at an uncontested Swiss auction. The ARC offered ₹222.5 crore to acquire the loan book of ₹619 crore, which equated to a recovery of 36% for lenders.

However, the NARCL will be able to close the deal only after the government issues a fresh guarantee on redemption of the security receipts, which has been pending since the beginning of this fiscal year. The shortfall in the recovery of loans promised by NARCL is guaranteed by the government.