JM Financial ARC has emerged as the preferred bidder to take over the Rs 971 crore debt of Distribution Logistics Infrastructure Pvt Ltd (DLI) with a cash bid of Rs 621 crore. The bad loan aggregator has already paid the 10% earnest money deposit (EMD) in the case, the first step to take over the asset.
“Lenders had put up these loans for sale after an earlier attempt to settle the debt with the promoters fell through. The process will take some more time to be completed but JM Financial ARC has been declared as the anchor bidder,” a person familiar with the details said on condition of anonymity.
Queries emailed to JM Financial ARC and process advisor BoB Capital Markets did not elicit a response till press time.
JM Financial ARC’s offer envisages a recovery of about 64% for the lenders led by Bank of Baroda (BoB). Other creditors include Punjab National Bank, Union Bank of India, Bank of India and State Bank of India. BoB is the largest creditor with about 42% of the debt.
“JM Financial ARC has likely placed the bid in partnership with a large steel-to-auto conglomerate, which is also building its own logistics business,” said a second person with knowledge of the matter.
Lenders started the latest process in April after DLI promoters failed to honour their offer of a Rs 590 crore one-time settlement by paying the mandatory 10% EMD in October last year. Lenders will have to invite challenging bids through a Reserve Bank of India mandated Swiss auction, which JM Financial ARC will have a right to match.
Challenger bidders will have to submit a minimum bid of Rs 655 crore to challenge JM Financial ARC’s offer, according to documents seen by ET.
“There is a possibility that the promoters might challenge the process in court. This case has also been admitted in the NCLT (National Company Law Tribunal). So, lenders want to make sure all bases are covered before they invite challenging bids and close the case,” said the second person.
