Phoenix ARC, Backed by Kotak Mahindra Group To Sell NPA’s Worth ₹3,550 crore

Kotak Mahindra Group-backed Phoenix Asset Reconstruction Company (ARC) has announced a major asset sale, seeking expressions of interest (EoIs) for a substantial portfolio of non-performing assets (NPAs) valued at over ₹3,550 crore. This significant move is aimed at offloading a mix of secured and unsecured loans that are currently classified as distressed.

According to a newspaper advertisement, the portfolio up for sale includes 420 secured accounts totalling ₹187 crore and approximately 5.60 lakh unsecured accounts amounting to ₹3,363 crore. This diverse range of assets offers potential buyers a substantial opportunity to acquire a broad spectrum of distressed loans.

The ARC has set a deadline of August 26 for interested parties to submit their EoIs. Following the initial submission phase, entities will have until September 16 to conduct due diligence on the available accounts. Subsequently, binding bids will be invited on September 27. BOB Capital Markets, the investment banking and consultancy division of Bank of Baroda, is advising Phoenix ARC throughout the sale process.

While Phoenix ARC has not disclosed its pricing expectations for the sale, the process will involve a Swiss auction format following the receipt of initial bids. This auction will allow potential buyers to challenge the highest bid, with the final round scheduled for October 21. The ARC aims to finalise the sale and secure a buyer for the assets by November 25.

This strategic move by Phoenix ARC reflects a broader trend in the financial sector where distressed asset sales are being leveraged to clean up balance sheets and improve financial stability. The successful sale of these NPAs could have significant implications for the market and the participating entities, offering a potentially lucrative opportunity for investors in the distressed asset space.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.