HDFC will run an auction for two hotels, after a binding offer from Prudent ARC

23 Jun 2023 , 11:41 AM

According to news reports, HDFC, the largest home financing business in India, is expected to sell a loan portfolio that includes two five-star hotels in Ghaziabad that operate under the Radisson Blu brand to Prudent Asset Reconstruction business.

A Swiss challenge auction for the hotel assets with a combined debt balance of Rs 507 crore has been sparked by Prudent ARC’s binding bid of Rs 311 crore. The offer from Prudent results in a 61% recovery for the housing finance company.

As stated in a notice from HDFC, other asset reconstruction companies (ARCs) are encouraged to submit counteroffers by June 26.

The anchor bid of Rs 311 crore should be at least 5% greater than the counteroffer from other ARCs, which should be at least Rs 327 crore.

Prudent ARC will have the first opportunity to match the counteroffer because it is an anchor bidder.

As first reported by ET on June 16, 2022, HDFC sold a portfolio worth 577 crores, consisting of four loan accounts, to Assets Care and Reconstruction Enterprise (ACRE), an ARC sponsored by Ares SSG Capital.

The portfolio included loans from Sterling Urban Development, MEP Infrastructure Developers, Hotel Horizon, and Siti Networks.

Early in October of last year, HDFC sold another problematic portfolio to ACRE for 602 crores, with 1,180 crore in outstanding debts. It includes loans to Nirmal Lifestyle and the Vatika Group.

The merger of HDFC and HDFC Bank was announced on April 4, 2022. Each HDFC shareholder will receive 42 shares of HDFC Bank for every 25 shares of HDFC, in accordance with the exchange ratio. The top management of HDFC Bank stated in mid-April that the merger between the two would probably be completed by July of this year.

For the fiscal year 2022–2023, HDFC Bank reported a consolidated net profit of 46,149 crore, while HDFC reported a consolidated net profit of 27,700 crore.

For feedback and suggestions, write to us at [e-mail]