Banks transfer Jaypee Infratech’s ₹9,234-crore debt to NARCL

Banks have completed the transfer of ₹9,234 crore of loan to the National Asset Reconstruction Company (NARCL), marking the first acquisition for the government-backed bad-loan aggregator a year after the company started operations. CEO Rakesh Sharma confirmed the transfer without naming the account. IDBI Bank is the lead lender in the account with dues of ₹3,750 crore. Sharma said the transfer to NARCL will reduce the bank’s gross non-performing assets by 2.2 percentage points.

“The transfer was completed on Friday and now that banks have a template, more such deals will be done before the end of the month. We expect two more accounts to be transferred to the bad bank in the next few days namely – SSA International and Helios PhotoVoltaic,” said a person aware of the process.

The Jaypee transfer is a milestone for NARCL because it is the first and the largest account transferred by banks. Last January,

() chairman Dinesh Khara had announced that banks had agreed to transfer 38 NPA accounts worth ₹82,845 crore to the NARCL, 15 of which worth ₹50,335 crore will be transferred in the first phase.

Banks had agreed to sell the Jaypee Infratech debt to NARCL in October last year after the initial offer by the bad-loan aggregator did not receive any competing bids. Jaypee Infratech, a real estate and infrastructure company, was among the initial 12 entities the Reserve Bank of India (RBI) had referred to the National Company Law Tribunal (NCLT) in August 2017 under the Insolvency and Bankruptcy Code (IBC).

Late November, NARCL has offered ₹32.5 crore to match Rare ARC’s counter-bid to take over the debt of rice exporter SSA International, which owes creditors ₹530 crore. Helios PhotoVoltaic owes creditors a total of ₹851 crore.