Canara Bank invites counterbids for Indira Container via Swiss auction | Company News
State-owned Canara Bank, being the lead bank in a consortium of lenders to Mumbai-based Indira Container Terminal Pvt. Ltd. (ICTPL), has invited counterbids from interested entities on an all-cash structure for recovering dues of secured creditors in the company in a one-of-a-kind Swiss challenge auction, where a settlement offer from the existing promoters of the company is the anchor bid.
Other lenders in the consortium include Punjab National Bank, Central Bank of India, and India Infrastructure Finance Company. The auction notice states that the consortium of lenders desires to conduct a Swiss challenge process against the anchor bid to find a better bid by way of online e-auction, for the recovery of outstanding dues of the secured creditors, together with further interest, charges, and costs.
The existing promoters of the company have made a settlement offer of Rs 260 crore, which is now the anchor bid/base bid for the Swiss challenge auction that the state-owned bank intends to conduct on August 23, according to the auction notice.
In case the bank does not receive any counterbids during the Swiss challenge auction, the anchor bidder – settlement offer from existing promoters – will be declared the successful bidder. Additionally, the anchor bidder will get the ‘right of first refusal’ if counterbids are received in the auction process.
Counterbids, if any, have to be submitted with a minimum markup of 5 per cent on the anchor bid, i.e., Rs 273 crore. Entities interested in bidding for the asset have to submit an expression of interest (EoI) by August 19.
Additionally, the state-owned lender has established eligibility criteria for entities wishing to submit counterbids. Bidders must have a minimum net worth of Rs 250 crore as of the last financial year and must have achieved a minimum annual turnover of Rs 50 crore for each of the last three financial years. Further, the bidder has to furnish an earnest deposit money amount of Rs 45 crore.
Furthermore, Canara Bank has specified that in case the successful bidder in the auction process is not the anchor bidder, the lenders may facilitate a change in management and control of the company in favour of the successful bidder. This can be achieved by invoking the pledge of 51 per cent of the company’s equity shares, implementing a substitution agreement, or following the Prudential Framework for Resolution of Stressed Assets issued by the RBI on June 7, 2019.
Previously, Canara Bank had moved the National Company Law Tribunal (NCLT) in 2023 against the company as it failed to pay its dues of Rs 312 crore, including outstanding principal and interest. Consequently, in May, Indira Container Terminal Pvt. Ltd. was admitted into the corporate insolvency resolution process (CIRP), and Dinesh Kumar Aggarwal was appointed as the interim resolution professional.
Indira Container Terminal Pvt. Ltd. is a joint venture between listed infrastructure firm AJR Infra and Tolling Ltd. (erstwhile Gammon Infrastructure Projects Ltd) and Noatum Ports Sociedad Limitada.
First Published: Aug 05 2024 | 4:51 PM IST
