No other bidders submitted offers that could challenge or beat CFM’s anchor all-cash offer of ‘140 crore, they said.
CFM and PNB did not respond to emails seeking comment on the matter. According to people cited earlier, the development gives CFM control over about 49% of the ‘3,800-crore legacy non-performing asset, which it aims to acquire primarily for its real estate assets.
Gammon India is an engineering, procurement and construction (EPC) company. Earlier, the bad loan aggregator had taken over Gammon’s loans from IDBI Bank (18% of the debt) and Canara Bank (16% of the debt).
CFM’s offer at ‘140 crore means about a 73% haircut for PNB, which has a total exposure of ‘514 crore to the company.
Gammon’s total debt stands at about ‘3,800 crore. It has been a legacy NPA account in banks’ books for more than a decade, in partly because recovery from EPC companies is difficult as they have little real assets to show and are mostly entangled with litigations with regards to government payments.
“Looks like there is no one else who is interested in taking over Gammon’s debt,” said a person aware of the details. “So one can expect that CFM will likely look to buy more of the debt and consolidate its position as the largest holder of the Gammon debt.” Only Omkara ARC, which had taken over Union Bank of India’s Gammon loan two years ago, is the only asset reconstruction company (ARC) which has the debt.
CFM is looking to consolidate Gammon’s debt with an eye on some real estate assets. It also hopes to benefit from setting off some taxes on losses accumulated by the company. A liquidation petition filed by IDBI against Gammon is also pending in the Mumbai National Company Law Tribunal (NCLT).