The Abhijeet Group was setting up an 1100 megawatt (MW) coal-based power plant, Corporate Power, in Jharkhand, but could not complete it and also failed to service its loans.
The Asset reconstruction Company of India Ltd (Arcil), on Friday, said it is in final stages of taking possession of a large power plant with the Abhijeet Group.
The Abhijeet Group was setting up an 1100 megawatt (MW) coal-based power plant, Corporate Power, in Jharkhand, but could not complete it and also failed to service its loans.
Corporate Power had borrowed Rs 4,500 crore from a consortium of banks led by the State Bank of India.
"We are looking to take possession of this company and hopefully, once that is achieved, we could take it to the next level where the plant is completed," Arcil managing director and chief executive Vinayak Bahuguna said.
Sources said Arcil paid only around 25% of the loan value to the bankers, which means banks have taken a huge 75% hair-cut from the deal.
ALSO READ: Arcil aims to raise $300 million from sceptical overseas investors
Arcil bought the plant from lenders late last year, Bahuguna said, adding that he is expecting all approvals over the next few weeks. The move is as per the provisions in the Sarfaesi Act.
The nearly 1,100 MW thermal power plant, situated in Latehar district of Jharkhand, was built in two phases but both of them are incomplete.
"The first phase is more than 75% completed and the second phase is 60% complete. The first phase can get commissioned in about two years," Bahuguna said.
Arcil has already organised a small health camp for the villagers around the plant and will look at a permanent medical facility and a school, later on, he said.
Bahuguna said in the first half (H1) of this fiscal Rs 48,000 crore of Non-Performing Assets (NPAs) were put on sale but Arcil picked up only Rs 7,000 crore.
"Up to H1, Rs 7,000 crore worth NPAs were picked up by Arcil, while the offering was of Rs 48,000 crore. One of the seven deal got consummated," he said, adding that banks are likely to offer Rs 50,000 crore of bad loans in second half. Arcil had bought less than Rs 500 crore of NPAs during the period.
Going ahead, he expects banks to put on sale around Rs 3 trillion bad loans.
"Because of the proposed Bankruptcy Code and the Special Drawing Rights (SDRs) requirements, a higher number of these cases in 2017 will be forced to come to the market. We believe it would be three times of what it is now," Bahuguna said.
ALSO READ: Bankruptcy Code proposes disposing of cases within 180 days
When asked about fund-raising plans, he said it has enough funding to take care of whatever assets it wants to buy for the next three-to-six months.
For the nine months of this fiscal, Arcil had focused on recoveries and will now look at acquiring retail NPAs in the fourth quarter, he said, adding it is also in discussions with many banks for buying their retail NPAs.
"On the retail side, there is great opportunity for banks to monetise and book some revenues and profit. We are ready to pay 100% in cash, we have the bandwidth and we have the organisational set up with 17 branches and 300 staff on our roles," he said. At present, Arcil manages around 2.5 lakh retail accounts.
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