The Hindu Business Line : IDBI sells SPIC loans to Arcil

Chennai April 20 IDBI Bank sold its entire stock of loans given to Southern Petrochemical Industries Corporation (SPIC) to the Asset Reconstruction Company (India) Ltd (Arcil).

It is not clear as to how much IDBI Bank got for Rs 294.24 crore of the loans. When contacted, Mr Y.A. Mankad, Deputy General Manager, IDBI Bank, who was involved with the transaction, said he was not at liberty to disclose the price for which (Arcil) bought the loans. It is hence not clear as to whether IDBI would have got more than the `48 per cent repayment' offer made by SPIC last year.

It is also learnt that ICICI Bank has also sold its SPIC loans, worth about Rs 170 crore to Arcil.

IDBI's loans to SPIC were disbursed between 1992 and 2001. In March 1999, the bank lent Rs 124 crore to SPIC. In the same month two years later, it gave another loan of Rs 127 crore to the company.

In a letter to SPIC, the bank has said that because "SPIC's operations suffered a setback," the loans were rejigged under the `corporate debt restructure' mechanism in January 2003. "In view of the defaults committed by you, your account in respect of financial assistance has been classified as a non-performing asset," the letter says.

The letter advises SPIC that IDBI Bank had unconditionally and irrevocably sold, assigned and transferred the loans in favour of Arcil, which would be "deemed to be the lender in respect of the (loan) assets."

"You are hereby advised to take note of the aforesaid assignment and are called upon to make payment of the dues in future in respect of the financial assistance to Arcil," the letter says.

Meanwhile, it is also learnt that Punjab and Sind Bank has recently gone to the Debts Recovery Tribunal to recover its dues from SPIC.

SPIC owes around Rs 2,845 crore to about 30 banks. Most are public sector banks, though there are a few private sector banks.

None of the consortium members is a foreign bank. Bank of America, which was one of SPIC's banks, quit in 2001, it is learnt.

More Stories on : Non-Performing Assets | Securitisation | Private Banks | Petrochemicals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
UCO Bank pays interim to Govt

Forex reserves surge $2.7 b

Rupee gains 31 paise

IDBI Bank net up 6% in Q4 on interest income

Banks can sell derivative products

PNB opens 131st Kerala branch

ABN-Amro opens branch at Salem

Bond prices rise slightly

Forex reserves: Passing the buck to banks

IDBI sells SPIC loans to Arcil

Vijaya Bank may go slow on lending

Call rates remain unchanged

TMB hikes deposit rates