Zee Biz Exclusive: Finance Ministry instructs NARCL to complete takeover of 22 big NPAs by March 2022
The biggest account is of Videocon Oil Ventures, which has NPAs worth Rs 22,500 crore and the lead lender is SBI. Likewise, Amtek Auto has NPAs worth Rs 9014 crore, where Union Bank is the lead lender. Reliance Naval and Engineering which has NPAs worth Rs 8934 cr and the lead bank is IDBI Bank
Finance Ministry has asked National Asset Reconstruction Company Limited (NARCL) to complete the takeover of 22 identified top Non Performing Accounts (NPAs) by the end of financial year. Top officials of the department of financial services met the NARCL team this week and asked to negotiate with banks and complete the takeover of identified NPA accounts by 31st March 2022. So far 22 big stressed asset accounts worth Rs 82,496 Cr have been identified and will be the first of the lot to be sold to NARCL by banks. For these accounts the banks have fully provisioned. NARCL has already started discussion with lead banks of the identified accounts so that process can be completed. The first deal is expected to be closed by December end or early January. As per sources intent of the government is to clear the baggage of NPAs from old accounts so that balance sheet is strengthened.
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As per the sources the biggest of the lot includes Videocon Oil Ventures limited where banks have exposure of around Rs 22,500 Cr and lead bank is SBI. Similarly banks have exposure of around Rs 9000 Cr each in Amtek Auto and RNEL. Union Bank is the lead lender in Amtek Auto while IDBI Bank is lead lender for RNEL. Legacy accounts like Jaypee Infratech, Castex Technology too have been identified in the first lot, with around Rs 8000 Cr and Rs 6350 Cr exposure respectively. GTL, Visa Steel, Wind World India, Meenakshi Energy, Simhapuri Energy Limited and Lavasa Corporation. One road and two toll project has also been identified for sale by banks to NARCL. Others companies are from textile, real estate, paper and construction sector.
As part of the process NARCL will negotiate with banks over price to acquire the NPA accounts, of the agreed price 15 percent will be paid in and remaining 85 percent will be issued as security receipt. Government has already approved Rs 30,600 Cr for providing guarantee in case the realization value of the asset is below the security receipt. The guarantee will be for 5 years. NARCL will only acquire NPA accounts above Rs 500 Cr. Then the assets will be maintained and taken care by asset management company India Debt Resolution Company Ltd (IDRCL). IDRCL with the help of experts will try to turnaround the company and help in better realization from sale of assets.
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NPA यानि डूबे कर्ज की खरीद में आएगी तेजी
वित्त मंत्रालय का मार्च 2022 तक खरीद पूरा करने का निर्देशजानिए पूरी खबर ब्रजेश मिश्र से..@BrajeshKMZee pic.twitter.com/KOVbyj2ohV
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Post sale to NARCL banks will be free from the baggage of NPA, then they will be able to lend more for productive sectors of the economy. NARCL will initially acquire NPAs worth Rs 82,496 Cr and will go up to Rs 2 Lakh Cr. Finance Minister Nirmala Sitharaman had announced about creation of Bad Bank in her budget speech for 2021-22. In September cabinet approved the guarantee for security receipts.
(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
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