Central Bank of India and Mumbai based M Pallonji & Co are the two bidders for Future Enterprises’ insurance business offering Rs 450 crore and Rs 300 crore respectively, two people familiar with the process said. Two other bidders have offered to buy the company’s manufacturing units in Maharashtra and Karnataka, these people said.
Lenders had offered different parts of the company for sale after the initial attempt to sell the whole company failed to get substantial bids. Future Enterprises owes creditors more than Rs 13,540 crore. Central Bank is also the largest creditor to the group with more than Rs 4000 crore of admitted claims between the bank and its arm Centbank Financial Services. The insolvency and bankruptcy code (IBC) also allows creditors to submit a take over plan.
“The bids came earlier this month and are yet to be opened but prima facie they look a little weak given the huge amount of dues that the company owes creditors. Lenders will meet to decide on how to negotiate and the next course of action,” said one of the persons cited above. All bidders have paid a Rs 1 crore earnest money deposit (EMD).
Lenders are not in a hurry because they have time till the first week of May to complete the process and can also seek an extension of the timeline with the NCLT. While Central bank and Pallonji have bid for the insurance business, two other bidders, metal company Orissa Metaliks and Mumbai-based financial services company Uniworth Finlease – have bid for two manufacturing units at Tarapur-Palghar in Maharashtra and Mahadevapura-Bengaluru in Karnataka for Rs 30 crore and Rs 15 crore respectively. Central Bank and resolution professional (RP) Avil Menezes did not reply to an email seeking comment. All bidders could not be reached.
Creditors had divided the company’s assets into three clusters – insurance, textile businesses and other residual stakes hoping for improved valuations in a restarted bidding process after rejecting Kolkata-based steel tubes and pipes maker Jindal (India) Ltd’s offer of Rs 301 crore, which amounted to just above 2% recovery for the total admitted claims of Rs 13,540 crore of creditors. The company has not got any bids for its stake in two textile companies – Design and Apparels and Goldmohur Design and Apparels.
Eleven entities had expressed interest in bidding for either whole or parts of the debt-laden Future Enterprises, ET had reported in its January 19 edition.
Source: Economic Times