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Stanchart buys ICICI Bank NPAs worth Rs. 1,300 cr.

Special Correspondent

Major deal in non-performing loan sector


  • Portfolio comprises 310 borrowers
  • Sale preceded by due diligence

    CHENNAI: Standard Chartered Bank has announced that it has completed the acquisition of a non-performing loan portfolio comprising 310 borrowers with an outstanding principal balance of around Rs.1,300 crore from ICICI Bank,.

    This acquisition was done by the Alternate Investment Group of Standard Chartered Bank. "It is one of the most significant transactions ever carried out in the non-performing loan sector in India,'' a release from the bank claims. The borrowers range from operating companies facing cash flow difficulties to companies that are in various stages of liquidation, says the release. (Underlying collateral for these loans typically includes one or more of real estate, plant and machinery, stock and receivables, personal and corporate guarantees).

    Standard Chartered Bank was awarded successful bidder status last week, after a controlled auction by ICICI Bank, beating other participating banks and asset reconstruction companies.

    The sale was preceded by a due diligence exercise, which was carried out over a period of eight weeks. This due diligence was based on a secured Internet- based data room (remote) access provided to potential investors to view pertinent documents.

    Sometime ago, SBI sold NPA portfolio worth around Rs. 400 crore. Even ARCL (Asset Reconstruction Company Ltd.) had also sold NPA portfolio worth around Rs.100 crore. The NPA sale is a nascent trend in India, happening in the wake of recent guidelines.

    This acquisition is strategic for our business and has enhanced Standard Chartered Bank's position as a leading distressed assets and hi-yield investor in Asia, Africa and the Middle East. We also believe resolution of non-performing loans in India is moving in a positive direction as a result of the Government's effort to continue reform over the past few years,'' the release quotes Paul Jurie, Global Head, Alternate Investment Group, Standard Chartered Bank, as saying.

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