NARCL offers Rs 360 crore to acquire Delhi-based Agson Global's bad debt

80 per cent haircut for lenders if offer accepted

State-owned National Asset Reconstruction Company (NARCL) has given an offer of Rs 360 crore to acquire the debt of eleven lenders led by Indian Overseas Bank (IOB) in Delhi-based Agson Global Pvt Ltd, according to people aware of the development. Total bank loans to the company amount to Rs 1,800 crore.

The offer by NARCL, consisting of 15 per cent cash consideration and the balance 85 per cent in security basis, if accepted, will result in a recovery of around 20 per cent for the lenders.

Meanwhile, NARCL is also expecting a decent recovery from the asset, sources said. The offer from the state-owned asset reconstruction company is still being considered by the eleven banks in the consortium.

 

Among the eleven lenders, IOB has the highest exposure of Rs 710 crore, followed by Punjab National Bank with Rs 331.30 crore, Union Bank of India with Rs 169.11 crore, Bank of India with Rs 150.28 crore, and UCO Bank with Rs 122.79 crore. Other lenders in the consortium include Canara Bank, State Bank of India, Central Bank of India, Bank of Baroda, Indian Bank, and IDBI Bank.

Agson Global, a manufacturer in the field of aroma ingredients, is currently undergoing insolvency proceedings, prompted by an insolvency application from the erstwhile Allahabad Bank (now Indian Bank).

An email sent to NARCL and IOB did not elicit a response until press time.

NARCL has been on a debt acquiring spree since last year. It has acquired around Rs 93,000 crore of stressed debt until March 31, 2024.

Incorporated in 2021, with the majority stake held by public sector banks and the balance by private sector banks, NARCL had a target of acquiring fully provisioned stressed assets from banks worth Rs 2 trillion. NARCL acquires stressed debt on a 15:85 cash to security receipts structure. The security receipts issued by NARCL have a government guarantee of up to Rs 30,600 crore. The condition precedent for the invocation of the guarantee would be resolution or liquidation. The guarantee would cover the shortfall between the face value of the security receipts and the actual realisation.