Canara Bank-Led Consortium Sells KTPL's Rs 520 Crore Debt to Prudent ARC
A consortium led by Canara Bank has sold the debt of Karanja Terminal and Logistics (KTPL) to Prudent Asset Reconstruction Company (ARC) for Rs 520 crore through a Swiss challenge auction. The sale represents a recovery rate of over 86% on the original outstanding loans of approximately Rs 600 crore. Prudent ARC's all-cash offer exceeded both the base price of Rs 428 crore and the promoter's one-time settlement offer of Rs 475 crore. Multiple institutional investors are co-investing with Prudent ARC. The sale is subject to ongoing court proceedings as KTPL's promoters have challenged the debt assignment.
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A consortium led by Canara Bank has successfully sold the debt of Karanja Terminal and Logistics (KTPL) to Prudent Asset Reconstruction Company (ARC) through a Swiss challenge auction. The sale marks a significant recovery for the lenders involved in the transaction.
Key Details of the Debt Sale
| Aspect | Details |
|---|---|
| Debt Sold | Rs 520.00 crore |
| Recovery Rate | Over 86% |
| Original Outstanding Loans | Approximately Rs 600.00 crore |
| Base Price for Auction | Rs 428.00 crore |
| Promoter's One-Time Settlement Offer | Rs 475.00 crore |
| Winning Bid (Prudent ARC) | Rs 520.00 crore |
| Bid Type | All-cash offer |
| Excess Over Base Price | Rs 92.00 crore |
| Excess Over Promoter's Offer | Rs 45.00 crore |
Transaction Highlights
The Swiss challenge auction saw Prudent ARC emerge as the winning bidder with an all-cash offer of Rs 520.00 crore. This bid significantly exceeded both the base price set for the auction and the promoter's one-time settlement offer. The successful sale allows the lenders to recover over 86% of their dues from KTPL.
Investor Participation
Multiple institutional investors are reported to be co-investing alongside Prudent ARC in this transaction. This collaborative approach suggests a strong interest in the asset and confidence in its potential recovery value.
Legal Proceedings
It's important to note that the sale is subject to ongoing court proceedings. KTPL's promoters have challenged the debt assignment, which adds a layer of complexity to the transaction's finalization.
About KTPL
Karanja Terminal and Logistics operates a port facility in Maharashtra's Raigad district. The company was classified as a non-performing asset due to delays in loan repayments, which led to the current debt sale process.
Implications
This successful debt sale demonstrates the banking sector's efforts to resolve non-performing assets through market mechanisms. The high recovery rate achieved in this transaction could be seen as a positive sign for the resolution of similar cases in the future.
However, the ongoing legal challenge by KTPL's promoters underscores the complexities often involved in debt resolution processes in India. The outcome of these proceedings will be crucial in determining the final resolution of this case.
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