Aditya Birla ARC purchases the KSK Mahanadi Power loan account from SBI for Rs1,622 crore

19 Aug 2022 , 03:36 PM

SBI accepted a haircut of over 58% off the total outstanding when selling the non-performing loan account of KSK Mahanadi Power Company to Aditya Birla ARC for Rs1,622 crore. As of April 2022, KSK Mahanadi Power Company owed the State Bank of India (SBI) a total of Rs3,815.04 crore in loans.

SBI announced in a regulatory filing on Thursday that it had "started open offer e-auction toward the sale of fund-based exposure of KSK Mahanadi Power Co. Ltd on 100% cash basis on April 20, 2022, for a reserve price of Rs1,544.08 crore."

In an auction held at the end of May, the state-owned lender got a total of 15 expressions of interest (EoIs), but only one bid–for a sum of Rs1,544.08 crore–came from Aditya Birla ARC.

The lender claimed Aditya Birla ARC increased the offer to Rs1,622 crore after receiving no further bids during a Swiss challenge auction process in June.

According to SBI, the deal was completed on August 12, 2022, following permission from the appropriate internal authorities.

The lender had already postponed the KSK Mahanadi e-auction in December 2021 due to procedural concerns.

The total amount owed to the company at the time was approximately Rs4,100 crore.

KSK Mahanadi Power, which was founded in June 2009, spent more than two years going through the corporate insolvency resolution process mandated by the 2016 Insolvency and Bankruptcy Code.