Arcil offers 27% recovery to IndusInd Bank for ITNL promoted Chenani Nashri Tunnelway Ltd

Asset Reconstruction Company of India (Arcil) joined the race to acquire debt in Chenani Nashri Tunnelway Ltd (CNTL) offering 27% recovery to private lender IndusInd Bank NSE 0.80 %, said people with knowledge of the matter.

Early this month, Ares SSG Capital-backed asset reconstruction company, Assets Care and Reconstruction Enterprise (ACRE) acquired Federal Bank’s debt, as reported by ET.

Banks are selling loans to ARCs after the road asset owner, IL&FS Transportation Network Ltd (ITNL), failed to close a deal it signed almost a year ago with I Square Capital-backed Cube Highway to sell CNTL.

Arcil’s Rs 208 crore full cash offer for IndusInd Bank’s Rs 752 crore unsecured debt has triggered a Swiss challenge auction, the people said. The private bank invited expression of interest from potential buyers on December 16, according to a notice issued by the bank on its website today. Arcil’s offer would be the anchor offer at the proposed auction.

Responses from IndusInd Bank and Arcil will be updated when they reply to ET’s query.

ACRE had offered Rs 212.6 crore for Federal Bank’s secured debt which equates to a recovery of 75 paise on a rupee

The wide difference in the offer between Arcil’s 27% offer to IndusInd Bank and ACRE offering 75% to Federal Bank is mainly because IndusInd Bank’s loan is not backed by any security, unlike Federal Bank’s debt facility.

Lenders had estimated the project cost of CNTL at Rs 5,454 crore, of which ITNL infused equity of Rs 372 crore and banks provided loans of Rs 4,765 crore, according to a document seen by ET. An income of Rs 700 crore earned through annuity by the company was distributed to lenders early this year.

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