Lenders to Marg Group’s Karaikal Port have decided to sell Rs 860 crore of loans to asset reconstruction companies (ARCs), sources told FE, adding that the gross debt of the company is close to Rs 1,800 crore.
According to sources, Punjab National Bank (PNB), United Bank, Central Bank of India, Allahabad Bank and Oriental Bank of Commerce (OBC) have put up their loans for sale to ARCs. Of the banks that want to sell their loans, United Bank has the largest share at Rs 250 crore, followed by PNB at Rs 240 crore.
“While Indian Bank has the maximum exposure of around Rs 405 crore, the bank is yet to put it up for sale,” a source added. Some private equity firms, including Standard Chartered Private Equity and Ascent Capital, have also invested in the company.
Lenders explained that United Bank and Allahabad Bank’s share are being negotiated by ARCs at the moment and the deal is likely to be closed soon.
“The port was used by infrastructure development company IL&FS to bring coal for its thermal power project near the port and by Tamil Nadu Electricity Board. However, there is hardly any traffic at present, leading to a cashflow problem,” a banker said.
In a regulatory filing, it said that traffic achieved in FY14 stood at 6.23 MT of multi cargo with 205 major cargo vessels as compared to 6.61 MT with 237 vessels handled in FY13, a drop of 5.75%. Karaikal Port Private Ltd (KPPL) is a subsidiary of Marg Ltd, a infrastructure and real estate developer along the Chennai IT corridor with interest ranging across various areas that include residential projects, commercial real estate projects, SEZs, ports, townships, IT parks and malls.
The company’s term loans of Rs 1,268 crore were restructured in FY13 with a two-year moratorium ending December 31, 2014 along with an additional funding of Rs 80 crore.
In FY14 it reported a net loss of Rs 69 crore on the back of Rs 263 crore in revenues. The company’s debt stood at Rs 1,650 crore in FY14 (latest document available), from Rs 1,619 crore in the previous year.
Meanwhile, lenders could sell NPAs worth Rs 20,000 crore to asset reconstruction companies (ARCs) in FY15 out of more than Rs 90,000 crore of assets put on sale. In FY14, banks had offered assets worth Rs 40,000 crore and ARCs bought loans amounting to Rs 22,000 crore.