Secured lenders backed Areion Group’s unconditional offer even though Unity Small Finance Bank had placed the highest bid of ₹977.5 crore during the challenge auction. The secured lenders opted for Areion’s plan as Unity had attached several conditions to its offer, said the people cited above.
Secured lenders, representing 98.2% by value, unanimously voted in favour of Areion Group, which operates an alternative investment fund through Areion AMC and an asset reconstruction company via Omkara ARC.
“While Unity Small Finance Bank had put in the highest bid, lenders were more comfortable with Areion’s unconditional offer,” said a person familiar with the resolution process. “The conditions attached to Unity’s plan raised execution concerns, and lenders preferred certainty of recovery over a higher headline value.”
Unsecured lenders did not participate in the voting process.
According to people familiar with the matter, lenders were uncomfortable with multiple conditions attached to Unity’s resolution plan. Areion Group, Unity Small Finance Bank and the administrator, Ram Kumar, declined to comment.
Multi-Cornered ContestSix entities had initially expressed interest in acquiring Aviom India under the National Company Law Tribunal (NCLT)-supervised resolution process, though only three participated in the auction that concluded last week.
During the auction held in the last week of December, Unity emerged as the highest bidder after 13 rounds of bidding, offering ₹977 crore. Areion and Authum exited the process after submitting final bids of ₹936 crore and ₹850 crore, respectively. The administrator has admitted 60 claims aggregating ₹1,363 crore. LIC Housing Finance has the largest exposure at 7.2%, while lenders with less than 3% exposure include HDFC Bank, Kotak Mahindra Investments and Tata Capital. The RBI admitted Aviom to the corporate insolvency resolution process under the Insolvency and Bankruptcy Code in February this year after the housing finance company began defaulting on its loans. Aviom’s troubles began after auditors flagged discrepancies in its books, triggering investigations by the National Housing Bank.