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    NARCL matches Raj Radhe's Rs 130-cr bid for CCC

    Synopsis

    Last week, ET reported that NARCL had agreed to match Rare ARC's counter bid to take over the debt of rice exporter SSA International, making it the second acquisition for the bad-loan aggregator. Last month, in response to a Swiss challenge called by banks, Raj Radhe had offered ₹130 crore cash, topping the NARCL's ₹100 crore bid.

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    Bankers are hoping that the delay in the approval is because Jaypee is the first deal by NARCL, which includes an unprecedented government guarantee and the process will get ironed out once a precedent is set.

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    Mumbai: The National Asset Reconstruction Co (NARCL) has matched Gujarat-based NBFC Raj Radhe Finance's ₹130 crore offer to take over the debt of Consolidated Construction Consortium (CCC), clearing the decks for the government-backed ARC to take over the engineering, procurement and construction company in what will be its third acquisition.

    "NARCL has agreed to match the counter offer received in the Swiss challenge, which means they can now take over the debt," said a person familiar with the process.

    This is the second offer matched by NARCL in a week after it had matched a similar bid for SSA international.

    Last week, ET reported that NARCL had agreed to match Rare ARC's counter bid to take over the debt of rice exporter SSA International, making it the second acquisition for the bad-loan aggregator.

    Last month, in response to a Swiss challenge called by banks, Raj Radhe had offered ₹130 crore cash, topping the NARCL's ₹100 crore bid.

    This is the second time the NARCL has increased its offer for CCC. Its initial offer was at ₹60 crore, which was increased to ₹100 crore after banks had protested the low bid.

    NARCL's chief executive did not reply to an email seeking comment till press time.

    "It also raises some questions on the valuation matrix used by NARCL because the latest offer is more than double its previous one. Either they had undervalued it the first time or are overvaluing it now, which is not healthy for a sovereign-backed entity," said a second person aware of the bid.

    To be sure, even the enhanced offer from NARCL amounts to a 5% recovery for lenders on total outstanding dues of ₹2,623 crore. It is even lower than the promoter's offer for settlement at ₹195 crore, which had envisaged a 7.5% recovery for banks.

    Moreover, NARCL's offer is not on a full cash basis and includes 85% security receipts (SRs), which will be issued by the bad loan aggregator to be liquidated and paid to banks only after recovery is made.

    CCC being an EPC company does not have any real assets but there could be future claims and awards, which could yield some returns, bankers said.

    CCC marks the third acquisition for NARCL after agreeing to take over the debt of Jaypee Infratech and SSA International respectively.

    However, banks are still awaiting final government approvals for it to take over Jaypee Infratech debt for which it had submitted a binding bid in September.

    Real estate company Jaypee Infratech owes lenders led by IDBI Bank ₹9,234 crore. NARCL had offered ₹3,570 crore to take over the debt, the biggest to date by the government-backed bad bank.

    Bankers are hoping that the delay in the approval is because Jaypee is the first deal by NARCL, which includes an unprecedented government guarantee and the process will get ironed out once a precedent is set.




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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