\nThe public sector bank, which was recently sold by the government to Life Insurance Corporation (LIC), has put on the block loans of RCom and Reliance Telecom with gross principal outstanding of Rs 1,056 crore. It is also selling loans of Loop Mobile valued at Rs 105 crore. Other NPA assets for sale are Mittal Corp (Rs 73-crore exposure), Amzen Transportation Industries (Rs 79 crore), Nandhi Dal Mills (Rs 32 crore) and Sunrise Pictures (Rs 7.83 crore).According to bankers, until loans are fully written off, lenders have to make ageing provisions, which take a toll on their profits. Bloomberg reported this week that the bank may sell up to Rs 10,000 crore of bad loans in a bid to bring down its NPAs, which are currently 30% of its portfolio.
Banks had started classifying RCom as an NPA a year ago. Since they have to periodically make fresh provisions, a large part of the loans would have already been provided for. IDBI Bank has set a reserve price of Rs 470 crore, which is less than 45% of the principal outstanding amount. However, given that the bank would have already provided for a large part of the loan, a sale at even half of the outstanding amount would be positive for the bank.
In the case of Loop Mobile, IDBI Bank has chosen to invite offers under the ‘Swiss Challenge’ method. This involves the seller calling for bids from the open market based on an offer that it has already received. The original bidder will then be given an opportunity to match the highest bidder. It is not known which is the company that has made an offer for Loop Telecom<\/a>.
Last year, IDBI Bank had tried to separately sell its erstwhile headquarters — the seven-storied BPL Towers in Central Mumbai — at a price of Rs 135 crore. Prior to being taken over by the Dubai-based Khaitan Group, Loop Telecom was known as BPL Telecom.
For the other companies, the bank has indicated a higher haircut. For instance, in the case of Mittal Corporation, the reserve price is Rs 29 crore or 40% of the outstanding amount. In the case of Amzen Transportation (formerly Amtek Railcar), the reserve price is Rs 52 crore which is around 65% of the outstanding amount.
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