Canara Bank-led consortium sells KTPL's Rs 520-crore debt to Prudent ARC

Synopsis

A lenders' consortium led by Canara Bank has successfully sold ₹520 crore of Karanja Terminal and Logistics (KTPL) debt to Prudent ARC through a Swiss challenge auction. This all-cash transaction recovered over 86% of the dues, significantly exceeding initial offers and the base price. The sale, however, is pending ongoing court proceedings initiated by KTPL's promoters.

Mumbai: A lenders' consortium led by Canara Bank has sold ₹520 crore debt of Karanja Terminal and Logistics (KTPL) to Prudent ARC, recovering more than 86% of the dues.

The transaction was completed through a Swiss challenge auction with an all-cash resolution. Facing an outstanding loan of about ₹600 crore to Karanja, the lenders initiated the auction process, setting a base price of ₹428 crore to discover market value before confirming the promoter's one-time settlement (OTS) offer of ₹475 crore.

While several asset reconstruction companies initially showed interest, the lenders did not get any counter offers, leaving Prudent ARC's binding ₹520 crore all-cash offer as the winning bid. The offer improves recovery prospects for lenders to nearly 86% of total dues, exceeding both the base and promoter's offer by about ₹100 crore.

BOB Capital was the process advisor for the transaction.

"This is one of the first instances where lenders opted for a transparent price discovery process before confirming an OTS, which has led to a materially higher recovery," said a person familiar with the process.

The bid is backed by multiple institutional investors co-investing alongside Prudent ARC, said people aware of the development.

The sale is however subject to ongoing court proceedings as the promoters of Karanja have challenged the proposed debt assignment to the ARC. The matter is sub judice, and the next hearing is awaited.

Karanja Terminal & Logistics, which operates a port facility in Maharashtra's Raigad district, was classified as a non-performing asset after repayment delays.

It is an SPV formed by Mercantile Ports and Logistics Ltd to develop an all-weather port and logistics facility at Karanja Creek, Chanje village, in Raigad district.

...moreless

...moreless