Recovering money from troubled companies is turning out to be difficult for lenders as there are few takers for assets put up for sale.
Following nil response from prospective bidders, the consortium of lenders to Gujarat NRE Coke has been forced to bring down the prices of 62 windmill assets in Kutch and Jamnagar which have a combined capacity of 87.5 mega watt (mw).
The reserve price of the wind mills, 60 of which are located in the desert region of Kutch, has now been brought down to Rs 255 crore from the earlier Rs 299 crore to elicit interest in the second auction.
“It has now been decided by the Asset Sale Committee to conduct a second round of bidding with a reserve price of Rs 255 crore,” said SBI Caps, whose Kolkata office would conduct the auction for the second time. The lenders have fixed June 10 as the deadline for submission of bids.
The consortium led by State Bank of India had earlier planned to conduct the auction in March and the advertising for it was done during the first week of that month. As they received no bids, SBI Caps was forced to extend the deadline till April 4, but even then they did not get any response.
Interestingly, before being taken over by the bankers, Gujarat NRE had tried to sell the assets on its own, but it did not get bids above Rs 220 crore, which is much lower than the current revised reserve price of Rs 255 crore.
The consortium has an exposure of a little more than Rs 3,000 crore to the beleaguered met coke maker while the creditors outside the CDR have an aggregate exposure of Rs 215 crore towards Gujarat NRE, one of the largest independent producers of metallurgical coke in India.
Gujarat NRE is now going for a separate debt restructuring deal with its unsecured creditors and those who weren’t part of the earlier Corporate Debt Restructuring done for the banks and financial institutions, dna had reported last week.
Blame it on the slowdown or the fear of its continuation, asset sale efforts are mostly drawing blank as prospective bidders are themselves passing through difficult times while others expects offer prices to fall to further in a shrinking economy, sources said.
SBI Cap’s earlier effort to sell Kingfisher Airlines’ head office at a desirable address in Mumbai in earlier in February failed to elicit any response.