Lenders of Vidarbha Industries Power have chosen CFM Asset Reconstruction Company as the anchor bidder for the proposed auction of their loans. This decision bypasses the bid made by the promoter, Anil Ambani’s group. CFM ARC’s bid of ₹1,220 crore has been selected as the anchor offer. Interested parties have been invited by the lead lender, Axis Bank, to submit counteroffers for the distressed thermal power company’s loans. CFM ARC will have the right to match the highest counteroffer received by lenders. The company currently has a principal debt of ₹2,569 crore. CFM’s bid represents 43% of the lenders’ principal debt. The decision to choose CFM’s bid over the promoter’s offer has surprised several experts in the distressed loan trade industry. Axis Bank, State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, and Bank of Maharashtra are among the lenders to Vidarbha Industries Power. The battle to acquire the power producer has raised hopes of a quick recovery for the lenders, as the Supreme Court rejected a plea to admit the company for insolvency proceedings despite a default. The company has won an award of ₹1,730 crore from the Appellate Tribunal of Electricity, which is higher than the ₹553 crore claimed by Axis Bank. Vidarbha Industries claims it has been unable to pay the lender due to the challenge raised by the Maharashtra Electricity Regulatory Commission. The matter is currently pending before the apex court.
