The Hindu Business Line : Asset Reconstruction Co to buy assets from promoters

ASSET Reconstruction Company (India) Ltd, the first ARC registered in the country, is all set to buy assets with a gross value of Rs 4,000 crore from its very own promoters — State Bank of India, IDBI and ICICI Bank. The whole exercise will be complete by mid-November, said senior officials.

The assets are those of nine companies namely, Birla VXL Ltd, Modern Denim Ltd, Core Healthcare Ltd, Shree Rama Multitech Ltd, GSL (India) Ltd, Precision Fasteners Ltd, Uniworth Ltd, Kalyanpur Cements Ltd and GSAL (India) Ltd and they will form nine separate funds or special purpose vehicles for which ARCIL will be the trustee. The assets will be bought with considerable discount at roughly Rs 2,000 crore.

"We will open the window to buy assets shortly and keep it open for two weeks. It will be a twin terminal window wherein we will buy assets as well as get qualified institutional buyers to invest in the funds floated. As of now, the selling banks will be the buying banks too," said Mr S. Khasnobis, President & COO, , ARCIL, on the sidelines of a seminar. "It will take sometime before FIIs and mutual funds step in to buy these funds," he added.

The valuation of assets will be at an average discount of 50 per cent to the gross principal outstanding amount with the band of discount varying from 25 per cent to 70 per cent.

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