distressed loans: SBI keen to sell distressed power, other loans

(SBI) is looking for buyers for its distressed loans, and about a third of them are for the power sector. Some of those accounts include Ruia-promoted Essar Power Gujarat, Anil Ambani’s Vidarbha Industries Power, KSK Mahanadi Power and Meenakshi Energy, three people familiar with the development told ET. circulated a list of 168 accounts among asset reconstruction firms and distressed loan buyers last week.

These accounts totaled unpaid debts of Rs 31,363 crore, sources said. SBI did not respond to ET’s questions. Excessive delays in settling the debt of troubled companies in bankruptcy courts and a government push to provide additional loans to already struggling power companies have encouraged lenders to consider exit options.

The two top accounts on the SBI list, reviewed by ET, are VOVL Ltd, a

linked to Videocon Industries with an outstanding loan of Rs 5,090 crore, and KSK Mahanadi Power, with Rs 4,101 crore in outstanding debts. “This is a preliminary list of key corporate accounts to gauge investor interest,” a senior bank official said. “On some accounts, the bank is in advanced talks with buyers.”

SBI launched a binding tender to sell its loans to KSK Mahanadi Power on May 30, after extending the deadline twice in the past. A dozen candidates, including Aditya Birla ARC and Phoenix ARC, backed by Varde Capital, have submitted expressions of interest. The bank has set a reserve price of 29 paise for each rupee.

Other major accounts in the power sector are Essar Power Gujarat at Rs 1,240.5 crore, Vidarbha Industries Power at Rs 1,245 crore, Coastal Energen at Rs 1,531 crore and Meenakshi at Rs 1,312 crore.

Last month, state-owned banks agreed to finance struggling power companies facing insolvency following a boost from the Center to help fill power shortages.

Other power producers on the list include Wind World India (992.8 crore), IL&FS Tamilnadu Power Co (543 crore) and Bhadreshwar Vidyur Power (Rs 262 crore). It also includes several companies that lenders have identified to be sold to the new National Asset Reconstruction Company Ltd (NARCL) – a government-sponsored ARC.

These include accounts such as

, Mittal Corp and . The list also includes several road project companies.

SBI’s gross non-performing loans stood at Rs 112,023 crore and the portfolio of restructured loans stood at Rs 30,960 crore at the end of March 2022.

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