17 February 2024 – The National Asset Reconstruction Company of India (NARCL), often referred to as the ‘bad bank,’ has submitted a bid of Rs 260 crore to acquire Metenere Ltd‘s Rs 3,040-crore debt, translating to an 8.5% recovery for lenders. Led by the State Bank of India, a consortium of 10 lenders has accepted the offer under a 15:85 structure and has opened the floor for counter offers from other asset reconstruction companies.
NARCL, established by the government to address bad loans, has made a significant bid for Metenere Ltd’s debt, marking a crucial step in the resolution process. The 15:85 structure involves a cash component of 15% and the remainder as a security receipt (SR), initiating a competitive Swiss challenge auction.
NARCL’s Bid and Auction Details:
Lenders, including the State Bank of India, have given a nod to NARCL’s offer, setting the stage for a Swiss challenge auction on March 6. The auction invites counter offers with a markup of Rs 15 crore over the anchor offer. NARCL retains the first right to match any counter offer, introducing a competitive element to the debt resolution process.
About Metenere Ltd:
Metenere Ltd, currently undergoing corporate insolvency, specializes in lead recycling and the production of non-ferrous products like tin and aluminum. The insolvency proceedings, initiated in September 2020, have faced legal challenges, contributing to the prolonged resolution.
The consortium of lenders, holding 92% of the debt, initially approved Shoora Capital FZE’s resolution plan. However, a subsequent breach prompted a withdrawal of their approval. The NARCL bid aims to navigate the complexities and offer a viable resolution strategy for the debt-ridden Metenere.
Conclusion:
NARCL’s proactive bid for Metenere’s debt underscores the ongoing efforts to streamline debt resolution in the country. The Swiss challenge auction introduces transparency and competition into the process, emphasizing the commitment to finding an optimal resolution for both lenders and the distressed company. The outcome of the auction will shape the trajectory of Metenere’s insolvency proceedings.
