Lenders to Gayatri Projects get lone resolution bid offering 10% recovery, ET RealEstate

October 24, 2023

MUMBAI: Lenders to Gayatri Projects have received a single bid for the debt-laden engineering, procurement, and construction (EPC) company from Dubai-based private equity fund Mark AB Capital Investment LLC, offering them about 10% recovery on their total dues of ₹6,000 crore.

The bankers had received two expressions of interest (EOIs) earlier this year but the other joint bid from two individuals did not result in a serious offer, people familiar with the process said.

Mark AB’s offer includes a small upfront payment, with the remaining payment differed after two years.

“The offer includes a total of ₹50 crore upfront cash, ₹50 crore capital infusion, and the remaining ₹500 crore to be paid after two years,” said a person aware of the details. “Mark has said that it will partner with an asset reconstruction company to assign the debt and pay recoveries from it after two years.”

Last week, Gayatri Projects‘ resolution professional Sai Ramesh Kanuparthi successfully petitioned the National Company Law Tribunal (NCLT) to expand the resolution timeline, which has been extended by 60 days.

Bankers are expected to close the deal by December.

“Creditors will look to negotiate a better deal including some commitment for covering the bank guarantees (BGs) issued to the company,” said a person aware of the details. “The company has about ₹1,000 crore of BGs outstanding, which if invoked will have to be borne by the lenders. The final negotiations will include improving the offer to ₹700 crore and also a commitment to extinguish the BGs,” the person said.

Kanuparthi did not reply to an email seeking comment.

Besides loans and bank guarantees, Gayatri Projects has also issued corporate guarantees amounting to ₹2,000 crore to its special purpose vehicle Indore Dewas Tollways and subsidiary Sai Maatarini Tollways, which also form part of dues to banks, though lower in the financial waterfall. Both these projects have been terminated by the National Highways Authority of India (NHAI) with arbitration claims pending.

If successful, this will be the second acquisition for Mark AB in India. In September 2022, the fund took a 26% stake in Shriram EPC for ₹350 crore as part of a bank-led restructuring plan that included the conversion of some debt into NCDs.

Promoted by former Rajya Sabha MP T Subbarami Reddy, Gayatri Projects was admitted to the Hyderabad bench of NCLT in November last year.

Financial creditors to the company are led by the Bank of Baroda (BoB) with 28% of the debt and include Canara Bank and State Bank of India (SBI). Other lenders include Federal Bank, Punjab National Bank, Union Bank of India, Bank of Maharashtra and Indian Overseas Bank.

  • Published On Oct 24, 2023 at 09:25 AM IST

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