SBI sells KSK Mahanadi Power NPA loan account to Aditya Birla ARC

Mumbai (Maharashtra) [India], August 19 : State Bank of India, the country's largest lender on Friday said it has sold its non-performing asset loan account of KSK Mahanadi Power Company to Aditya Birla ARC Ltd for Rs 1,622 crore.
KSK Mahanadi Power Company's total loan outstanding amount to SBI stood at Rs 3,815.04 crore.
"In terms of the Bank's policy on Transfer of Stressed Loan Exposure and in line with regulatory guidelines, SBI initiated open offer e-auction towards Sale of Fund Based Exposure of KSK Mahanadi Power Co, Ltd. on 100 per cent cash basis on 20.04.2022 for a Reserve Price of Rs 1,544.08 crore," SBI said in a regulatory filing to the stock exchanges.
ln this regard, a paper publication was done in Business Standard and Navshakti along with web notice at SBI Website. While we received 15 EoIs, only one bid was received from Aditya Birla ARC Ltd. for an amount of Rs 1,544.08 crore on date of the auction.
A Swiss challenge process was also initiated on 31st May 2022 based on offer received from Aditya Birla ARC Ltd and a paper publication was done in Business Standard and Navshakti along with web notice at SBI website. No competing bid received under Swiss challenge on 21.06.2022. Based on subsequent discussions, Aditya Birla ARC Ltd, improved the offer to Rs 1,622 crore. Thereafter, approval from competent internal authorities was obtained and the assignment concluded on 12 August 2022, SBI said.
"We are of the opinion that the resolution strategy adopted is optimal at this juncture," the government sector lender said.
Transfer of stressed loan exposure is in line with the Banks' policy and regulatory guidelines and is in nature of the normal business activity for reduction of NPA, SBI said in reply to a clarification sought by the stock exchanges on reports related to the sale of the loan accounts.