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In a bid to liquidate equity shares allotted to it under restructuring package, Oriental Bank of Commerce is planning to rope in an advisor to assess its equity stake in 30 to 40 listed as well as unlisted companies acquired under the package and advise it on company-wise feasibility of stake sale.
In FY2018, the public sector bank invoked Strategic Debt Restructuring (SDR) as per Reserve Bank of India guidelines and acquired shares (through conversion of its exposure into equity) in companies such as Chennai Network Infrastructure Ltd (CNIL), GTL Infrastructure Ltd, Supreme Ahmednagar Karmala Tembhumi Tollways Pvt Ltd, Ballarpur Industries Ltd, Athena Chhattisgarh Power Ltd, and Aman Hospitality Private Ltd pursuant to invocation of SDR.
The equity shares allotted under restructuring package include terms & conditions (such as lock-in period, Right of First Refusal, etc) regarding the transferability of shares as defined in the agreement executed between the Bank and respective company. Further, the bank said permission from the regulatory authority(s) may be required before liquidating the stake in respective company, which may depend on case to case basis.
The exposure converted into equity under SDR in the case of CNIL (now GTL Infrastructure Ltd, after merger of GTL Infrastructure Ltd and CNIL) is Rs 208.60 crore; GTL Infrastructure Ltd (Rs (Rs 31.38 crore); Ballarpur Industries Ltd (Rs 65.95 crore); Athena Chhattisgarh Power Ltd (Rs 51.55 crore); Aman Hospitality Private Ltd (Rs 84.13 crore); and Supreme Ahmednagar Karmala Tembhumi Tollways Pvt Ltd (Rs 4 lakhs).
The Bank has invited bids from Merchant Banker(s)/Insolvency Professional(s)/ Asset Restructuring Company(s)/Financial Consultancy Firm to advise it on the stake sale. It expects the advisor to be well-versed with legal, operational and technical matter(s).
With the RBI bringing in the revised framework for resolution of stressed assets on February 12, 2018, all the extant instructions on resolution of stressed assets, including SDR, have been withdrawn.
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