IDBI Bank puts Rs 9,500 cr loans on the block

IDBI Bank has put up loans worth Rs 9,500 crore for sale, and the accounts offered to potential buyers include the KKR-backed JBF Petrochemicals and JBF Industries, and Anil Ambani’s Reliance Communications.

JBF has consolidated debt of Rs 11,000 crore from public sector banks, including IDBI Bank, Indian Overseas Bank, Bank of Baroda, and Union Bank of India.

Loans offered are in the range of Rs 108 crore to Rs 1,736 crore, and the assets include Loop Mobile, Lanco Amarkantak Power, and Sai Wardha Power Generation.

The accounts on offer include loans worth Rs 721 crore to Reliance Communications. Banks have been selling assets to asset reconstruction companies (ARC), non-banks and overseas portfolio investors as resolutions through the National Company Law Tribunal (NCLT) are taking longer than anticipated.

“While many loan auctions are coming up recently, the transaction closures are limited due to price expectation mismatches between the seller banks and ARCs,” said Hari Hara Mishra, director, UV ARC. “As the resultant haircut is subject to scrutiny by various agencies, bankers have the natural hesitation in taking tough decisions.”

JBF is into making polyester value chain products used in consumer goods, textile and packaging industries, and was founded in 1982 as a yarn texturing firm.

JBF Industries had said in August 2018 that KKR will buy 100 per cent of JBF Petrochemicals. In 2015, the US-based PE firm had invested $150 million for 20 per cent in JBF Industries and compulsorily convertible preference shares. KKR was supposed to put in more funds and take a controlling stake in JBF’s Mangaluru-based subsidiary JBF Global Pte and paying back Rs 450 crore of intra-corporate deposits. Both these conditions have not been met, stalling the KKR fund infusion, ET reported earlier.

IDBI Bank had grossNPAs of 29 per cent as on June 30. The bank’s net loss rose to Rs 3,801 core in the June quarter.

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