MUMBAI: Lenders to Vidarbha Industries Power Limited (VIPL), a subsidiary of Reliance Power, have appointed SBI Caps as advisors for their debt resolution process.
As per the terms of reference, SBI Caps will invite bids for sale or one time settlement (OTS) of VIPL loan.
It will also set the evaluation criteria and recommendations for the anchor bidder.
SBI Caps will follow a fair and transparent process to ensure resolution of VIPL’s outstanding debt of over Rs 2,000 crore, said a source familiar with the matter.
Sources said SBI Caps will also be responsible for conducting the Swiss challenge process to maximize recovery for lenders.
The deadline for SBI Caps to complete the resolution process is September 30.
The terms of reference stated that SBI Caps, while executing the process, shall ensure compliance with the RBI guidelines dated June 8, 2023 for sale and outright settlement of VIPL loans.
The appointment of SBI Caps comes at a time when VIPL lenders have received three suo motu bids for sale and OTS of VIPL loans.
Reliance Power, the promoter of VIPL, has offered a one-time settlement to the lenders of VIPL.
Reliance Power’s all-cash offer of Rs 1,260 crore is backed by Verde Partners of Singapore.
Ahmedabad-based CFM Asset Reconstruction and NARCL are the other two bidders in the race.
CFM ARC’s cash offer of Rs 1,220 crore is lower than RPower’s offer of Rs 1,260 crore.
Notably, CFM ARC is one of the four asset reconstruction companies that have been issued show cause notices by the RBI following a special audit following Income Tax raids on the companies.
The Rs 1,120 crore offer by the third bidder, NARCL, is much lower than RPower’s OTS offer, as it is offering only 15 per cent in cash, while the rest will be paid over five years. The Net Present Value (NPV) of the NARCL offer is Rs 850 crore only.