Prudent ARC’s binding offer of ₹311 crore has triggered a Swiss challenge auction for the hotel properties with total loans of ₹507 crore. Prudent’s offer equates to a recovery of 61% for the housing finance company.
HDFC has invited counteroffers from other asset reconstruction companies (ARCs) by June 26, a notice issued by the housing finance company stated.
The counteroffer from other ARCs should be at least 5% higher than the anchor bid of ₹311 crore, which equates to ₹327 crore.
As an anchor bidder, Prudent ARC will have the first right to match the counteroffer.
HDFC and Prudent ARC did not respond to ET’s request for comment until Thursday press time.The ₹507-crore portfolio comprises loans of KAD Housing and KAJ Infrastructure, both promoted by DP Jain and his family. They operate two five-star hotels in Ghaziabad – Radisson Blu Kaushambi and Radisson Blu Hotel.HDFC mandated Alvarez & Marsal to sell a ₹2,000 crore real estate portfolio, people said.
In the last one year, HDFC has sold a part of its distressed real estate portfolio to clean up its books.
HDFC sold a ₹577 crore portfolio comprising four loan accounts to Assets Care and Reconstruction Enterprise (ACRE), an ARC backed by Ares SSG Capital, as first reported by ET on June 16, 2022.
The portfolio comprised loans of Siti Networks, MEP Infrastructure Developers, Hotel Horizon and Sterling Urban Development.
HDFC sold another distressed portfolio with outstanding loans of ₹1,180 crore to ACRE for ₹602 crore in early October last year, as first reported by ET. It included loans to Vatika Group and Nirmal Lifestyle.
The sale of distressed loan portfolios is a prelude to the merger of the housing finance company with its subsidiary HDFC Bank.
On April 4, 2022, HDFC and HDFC Bank announced the merger of the two entities. As per the swap ratio, each shareholder of HDFC will receive 42 shares of HDFC Bank for every 25 shares of HDFC. The merger between the two is likely to conclude by July this year, the top management of HDFC Bank announced in mid-April.
HDFC Bank announced a consolidated net profit of ₹46,149 crore, while HDFC declared a consolidated net profit of ₹27,700 crore for the fiscal year 2022-23.
