GVK asset sale: Syndicate Bank weighs fresh options to recover dues

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HYDERABAD: Having failed to evoke response from prospective buyers for the proposed auction of land assets of GVK Power & Infrastructure for recovering Rs 175 crore of dues, Syndicate Bank is now exploring fresh options to recover its dues.

Debt-ridden GVK group had faced the threat of its assets being auctioned off with Syndicate Bank serving notices early this month, putting on block over 2,500 acres of land at GVK Perambalur special economic zone (SEZ) in Tamil Nadu. The auction was scheduled for Monday but the bank did not receive any bids till last Friday, the last date for submission of bids by the prospective buyers for the land assets of GVK group.

“We are now weighing certain options for recovery of our dues, which include finding ways to reach out to the prospective buyers who could participate in the next round of auction,“ a senior Syndicate Bank executive told ET, requesting anonymity. “We are currently ascertaining reasons for not receiving response from prospective buyers for our latest auction of GVK’s assets.“ However, a GVK spokesperson said the company has “taken steps to settle the issue with Syndicate Bank,“ adding that the company has “already paid the first instalment and the auction process has been stopped.“

GVK group, which operates Bengaluru and Mumbai airports, utilities and other businesses, early this month that it was trying to stave off an auction by repaying the money that’s owed.

The promoters of Hyderabad headquartered GVK group, led by GV Krishna Reddy, had reportedly approached several prospective buyers, including the JSW group, for sale of various assets including the two airports to prune debt.

Last Friday, GVK Power & Infrastructure announced raising Rs 2,202 crore from Prem Watsabacked Fairfax India Holdings by selling a 33% stake in Bengaluru international airport.

Immediately after securing funds from Fairfax, the GVK Group chairman GV Krishna Reddy said the company would now focus on deleveraging its balance sheet and use the proceeds from stake sale in Bengaluru airport to bring down debt obligations to lenders. GVK Power & Infrastructure, the holding company for 29 firms into energy, airport, transportation and resources, currently has a consolidated debt of over Rs 32,000 crore and is finding it difficult to service loans amid dwindling revenues and accumulating losses.