INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED
NOTICE TO ASSET RECONSTRUCTION COMPANY'S (ARC's)
Sale of Financial Assets Invitation for offer
-
1. IIFCL intends to sell the financial assets, for 'cash' or 'cash-cum-SR', in
respect of the following NPA accounts on basis of 'without recourse' to IIFCL :(i) Concast Road SPVs.
a.
b.
c.
d.
Concast Ambha Road Projects Pvt. Ltd.
Concast Dhaneta Road projects Pvt. Ltd.
Concast Jawasa Road projects Pvt. Ltd.
Concast Morena road projects Pvt. Ltd.
(ii) Atlanta Infra Assets Ltd.
(iii) Mora Tollways Ltd.
2. Based on our assessment, we expect recovery in these accounts ranging from
short to medium term. However, we prefer to sell these financial assets in this
financial year from a balance sheet perspective.
3. Brief details of the above mentioned SPVs are attached in the Annexure.
You may express interest/give offer for purchase of all the above accounts or
individual accounts.
4. Please let us know your requirements in respect of due diligence,
examination of documents etc.
5. It may be noted here that IIFCL is inviting expression of interest/offer for
purchase from other ARCs also and IIFCL may undertake negotiation for
improvement in offer/terms, in its sole discretion. Kindly note that the proposed sale
is subject to final approval of Competent Authority of IIFCL.
INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED
6. Based on the feedback/interest/offer received, IIFCL may inform the colenders in the respective project, to facilitate and explore the possibility of a joint sale
based on mutual comfort of the lenders and the ARC.
7. The expression of interest/offer for purchase may please be sent to us on or
before 15 th January, 2016
8. In case of any clarification/query, you may please contact us.
Contact details:
Shri. Sanjeev Ghai,
Chief General Manager,
Landline: 011-23450261/23450252
Mobile: +919990725901
Email: [email protected]
Shri. T. Hari Krishnan,
Deputy General Manager,
Landline: 011-23450213
Mobile: +919873123589
Email: [email protected]
***************************************
2
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CONCAST
Project Description
TPC & means of
Finance
Bank/Fls involved
(Z in Crore)
SCOD
Securities Available
Physical/Financial
Progress
Status of the project
)0‘..
ROAD PROJECTS PVT 1,TD,
Development and operation/maintenance of existing four
major district roads under package —IX comprising of (i)
Ambha-Pinhat Road (23.115 Km) (ii) Tekna — ManpurRameshwar Road (19.410 Km) ( (iii) Nadigaon — Secondha
(23.27Km) (iv) Satanabada Narwar Road (25.540 Km)
Madhya Pradesh by intermediate-Laning/Two-Laving on
DBFOT on Annuity basis.
Z158.79 Cr.
Debt: Z111.15 Cr.
Equity:47.64 Cr. (Whole equity is infused as per CA
certificate)
Name of Bank/FI
Amount Sane.
Amount Disb.
PNB (Lead)
50.00
44.84
United Bank of 29.40
26.02
India
IIFCL
31.75
28.00
TOTAL
111.15
98.86
29.12.2014.
i)
A first charge and mortgage of all the borrower's
immovable properties.
ii)
Pledge over 51% of the equity 'shares of the
borrower.
iii)
A first charge on all the intangible assets of the
borrower,
iv)
Personal guarantee of Shri Sanjay Kumar Surekha
(Promoter)
v)
Corporate guarantee of Concast Infratech Limited.
As per LIE: 50.00%
As per IE : 30.00%
a) MPRDC, in the month of Feb'2015 had terminated the
Concession Agreement on account of slow progress, nonachievement of Milestones, default in payment of penalty.
The lenders as well as developers, requested MPRDC and
Appellate Authority to provide adequate chance and time to
remedy the situation / identify substitute, which, however
was not considered.
b) MPRDC proceeded to award the project on EPC mode to a
different contractor.
c) The borrower invoked the process of arbitration under
clause 44.3 of Concession Agreement. MPRDC has
suggested to invoke clause no 44,4 of the Concession
Agreement as Govt. of Madhya Pradesh has constituted a
separate Arbitration Tribune to deal with such cases.
3 op
d) The lenders have decided to conduct a "Special Audit" of
the SPY to ascertain the end use of the funds infused.
Possible avenues for
Recovery:-
i. Through process of Arbitration/Arbitration Tribunal.
ii. The Lenders have decided to initiate legal action by
recall of loan, invocation of guarantee and filing
recovery suit before DRT.
iii. After the initiation of legal action in DRT, lenders may
join, "without prejudice", the Arbitration process as in
(i) above.
iv. Lenders may proceed against MPRDC in I-Iigh Court,
to put stay on EPC work and to compensate the lenders
to the extent of work done in the project.
v. The initiation of legal action/special audit is expected
to put pressure on the Promoter to come up with a
proposal for settlement of dues (It may be highlighted
here that in Concast Jawasa project the Corporate
guarantee of the flagship company of the group viz.,
Concast Steel & Power (CSP) is available. Thus action
taken in the case by invoking the guarantee of CSP and
also by possible filing for its winding up is expected to
put elevated pressure on the Promoter to come up for
an acceptable settlement).
-
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CONCAST DITANETA ROAD PROJECTS PVT LTD.
Project Description
TPC & means of
Finance
Development and operation/ maintenance of the 2 Laning
works of the 4 MDRs under package-VI comprising of Dhaneta
— Rakhi — Shahajpur road (13.50 Km), Bichiya — Shammapur —
(12.69
Dindori road (53.42 Km), Bailkhedu — Saroud road
Kms and Suraiya — Simariya — Badhiyakheda — Padariya —
Dhamni —Singot road (13.22 Kms) with a total Length 92.82
Kms, in the state on design, Build, finance, operate and transfer
(DBFOT) on Annuity basis.
Z130.56 Cr.
Debt: 191.39 Cr.
Equity:31.97 Cr. q2..1 1 1 7 Cr is infused as_per CA certificateL_
Amount Disb.
Name of Bank/FI Amount Sanc.
28.33
Bank of India 33.00
(Lead)
27.31
32.39
Indian Bank
21.92
26.00
11FCL
77.56
91.39
TOTAL
03.08.2014,
A first charge and mortgage of all the borrower's
i)
immovable properties.
Pledge over 51% of the equity shares of the
ii)
borrower.
A first charge on all the intangible assets of the
iii)
borrower.
Personal guarantee of Shri Sanjay Kumar Surekha
iv)
(Promoter)
Corporate guarantee of Concast Infratech Limited.
v)
As per LIE Report:70.00%
As per IE Report : 56.00%
a) MPRDC, in the month of April'2015 had terminated the
Concession Agreement on account of slow progress, nonachievement of Milestones, default in payment of penalty. The
lenders as well as developers, requested MPRDC and Appellate
Authority to provide adequate chance and time to remedy the
situation / identify substitute, which, however was not
considered.
b) MPRDC proceeded to award the project on EPC mode to a
different contractor.
c) The borrower invoked the process of arbitration under clause
44.3 of Concession Agreement. MPRDC has suggested to invoke
clause no 44.4 of the Concession Agreement as Govt. of Madhya
Pradesh has constituted a separate Arbitration Tribune to deal
with such cases.
d) The lenders have decided to conduct a "Special Audit" of the
SPV to ascertain the end use of the funds infused.
.
Bank/FIs involved
(Z in Crore)
SCUD
Securities Available
____
PhysicaUFinancial
Progress
Status of the project
50.f ICA
Possible
avenues
for Recovery:-
i) Through process of Arbitration/Arbitration Tribunal.
ii) The Lenders have decided to initiate legal action by recall
of loan, invocation of guarantee and filing recovery suit
before DRT.
iii) After the initiation of legal action in DRT, lenders may
join, "without prejudice", the Arbitration process as in (i)
above.
iv) Lenders may proceed against MPRDC in High Court, to
put stay on CPC work and to compensate the lenders to
the extent of work done in the project.
v) The initiation of legal action/special audit is expected to
put pressure on the Promoter to come up with a proposal
for settlement of dues (It may be highlighted here that in
Concast Jawasa project the Corporate guarantee of the
flagship company of the group viz., Concast Steel &
Power (CSP) is available. Thus action taken in the case
by invoking the guarantee of CSP and also by possible
filing for its winding up is expected to put elevated
pressure on the Promoter to come up for an acceptable
settlement).
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CONCAST JAWASA ROAD PROJECTS PVT
Project In Brief
•
TPC and Means of
Finance
Promoters Equity
Banks/FIs involved
(in Cr)
Project Progress
Securities Available
Status of the project
um.
Design and Development of Intermediate Laning/ Two
Laning including the construction, operation, maintenance
and management (DBFOT) of two major district roads
(MDR) i.e Jawasa-Sunarpura Road (22.63 Km) & PawaiPrithvipura Road (22.343 Km) under package viii on annuity
basis in the state of Madhya Pradesh.
Z 74.77Cr.
Debt: Z18.69 Cr.
Equity: 256.08 Cr
Envisaged Equity: 218.69 Cr.
Equity Infused: Z18.93 Crore as per CA certificate
dated: 16.06.2014.
or Amount Sane. Amount Disb.
Name
Bank/FI
35.68
Corporation
42.00
Bank
11.97
14.08
IIFCL
TOTAL
56.08
47.65
As per LIE: 55.00%
As per IE: 38.00%
i) A first charge and mortgage of all the borrowers'
immovable properties.
ii) Pledge over 51% of the equity shares of the borrower.
iii) A first charge on all the intangible assets of the
borrower.
iv) Personal guarantee of Shri Sanjay Kumar Surekha
(Promoter)
v) Corporate guarantee of Concast Infratech Limited.
vi) Corporate guarantee of M/s Concast Steel & Power.
a) MPRDC, in the month of April'2015 had terminated the
Concession Agreement on account of slow progress, nonachievement of Milestones, default in payment of penalty.
The lenders as well as developers, requested MPRDC and
Appellate Authority to provide adequate chance and time to
find the suitable substitute for the project, however the
same was not considered.
b) MPRDC proceeded to award the project on EPC mode to
different contractor.
c) The borrower invoked the process of arbitration under
clause 44.3 of Concession Agreement. MPRDC has
suggested to invoke clause no 44.4 of the Concession
Agreement as Govt. of Madhya Pradesh has constituted a
separate Arbitration Tribune to deal with such cases.
d) The lenders have decided to conduct a "Special Audit" of
the SPV to ascertain the end use of the funds infused.
i)
Possible avenues for
Recovery:-
ii)
iii)
iv)
v)
vi)
of Arbitration/Arbitration
process
Through
Tribunal.
The Lenders have decided to initiate legal action by
recall of loan, invocation of guarantee and filing
recovery suit before DRT.
After the initiation of legal action in DRT, lenders
may join, "without prejudice", the Arbitration
process as in (a) above.
Lenders may proceed against MPRDC in High
Court, to put stay on EPC work and to compensate
the lenders to the extent of work done in the
project.
The initiation of legal action/special audit is
expected to put pressure on the Promoter to come
up with a proposal for settlement of dues.
It may be highlighted here that in this project the
Corporate guarantee of the flagship company of the
group viz., Concast Steel & Power (CSP) is
available. Thus action taken in this case by
invoking the guarantee of CSP and also by possible
filing for its winding up is expected to put elevated
pressure on the Promoter to come up for an
acceptable settlement.
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CONCAST MORENA ROAD PROJECTS PVT LTD.
Project Description
Two Laning work of the existing road viz. Morena-Sabalgarh
section of SH-02 from +junction at Km 0/10 to Km 73/6 at
sabalgarh ( Total Length — 72.6 Km and design length —
71.864 Km ) in the state of Madhya Pradesh on DBFOT on
Toll + annuity Basis (Total Length 71.864 kms)
TPC & means of
Finance
Z165.75 Cr.
Debt: Z124.31 Cr.
Equity:41.44 CR.
(Z22.00 Cr. equity is infused as per CA certificate)
Name of Bank/FI
Amount Sanc.
Amount Disb.
United Bank Of 42.16
18.76
India (LB)
Vijaya Bank
25.00
11.14
Indian Overseas 24.00
10.79
Bank
IIFCL
33.15
14.75.
TOTAL
124.31
55.34
30.04.2016
As per LIE report, the cumulative physical progress is 20.61%
and Cumulative financial Progress is 27.49%
A first charge and mortgage of all the borrower's
immovable properties.
Pledge over 51% of . the equity shares of the
ii)
borrower.
iii)
A first charge on all the intangible assets of the
borrower.
iv)
Personal guarantee of Shri Sanjay Kumar Surekha
(Promoter)
v)
Corporate guarantee of Concast Infratech Limited.
a) MPRDC, in the month of Feb'2015 had terminated the
Concession Agreement on account of slow progress, nonachievement of Milestones, default in payment of penalty.
The lenders as well as developers, requested MPRDC and
Appellate Authority to provide adequate chance and time to
remedy the situation / identify substitute, which, however
was not considered.
b) MPRDC proceeded to award the project on EPC mode to a
different contractor.
c) The borrower invoked the process of arbitration under
clause 44.3 of Concession Agreement. MPRDC has
suggested to invoke clause no 44.4 of the Concession
Agreement as Govt. of Madhya Pradesh has constituted a
separate Arbitration Tribune to deal with such cases.
Bank/Fls involved
(Z in Crore)
SCOD
Physical/Financial
Progress
Securities Available
Status of the project
'
cl of 14
Possible avenues for
Recovery:-
d) The lenders have decided to conduct a "Special Audit" of
the SPV to ascertain the end use of the funds infused.
i. Through process of Arbitration/Arbitration Tribunal.
ii. The Lenders have decided to initiate legal action by
recall of loan, invocation of guarantee and filing
recovery suit before DRT.
iii. After the initiation of legal action in DRT, lenders may
join, "without prejudice", the Arbitration process as in
(i) above.
iv. Lenders may proceed against MPRDC in High Court,
to put stay on EPC work and to compensate the lenders
to the extent of work done in the project.
v. The initiation of legal action/special audit is expected
to put pressure on the Promoter to come up with a
proposal for settlement of dues (It may be highlighted
here that in Concast Jawasa project the Corporate
guarantee of the flagship company of the group viz.,
Concast Steel & Power (CSP) is available. Thus action
taken in the case by invoking the guarantee of CSP and
also by possible filing for its winding up is expected to
put elevated pressure on the Promoter to come up for
an acceptable settlement).
M/s:ATLANTA INFRA ASSETS LIMITED
Project Description
Concessioning
Authority
Concession Period
Actual Project Cost
Bank/FIs Debt
(Z in Crore)
COD
Securities Available
Improvement, Operation and Maintenance including
Strengthening and Widening of existing 2-lane road to 4-lane
dual carriage way from Km 9.200-Km 50.000 of NH-6
(Nagpur-Kondhali Section)in the State of Maharashtra on
BUT Basis (Toll based)
NHAI
20 years from appointed date (07.06,2006)
Rs 316.47 crore
Name of the lender Sanctioned in Rs Principal
crore
Outstanding
Corporation Bank
10.00
8.53
Dena Bank
100.00
92.16
Dombivili Nagari
10.00
6.95
Sahakari Bank
IIFCL
96.00
89.39
(Direct+Take Out)
Union Bank of
40.00
20.88
India
Total
256.00
217.91
COD achieved on 22.09.2011.
i)
A first mortgage and charge on all the borrowers'
immovable properties, both present and future.
ii)
A first charge by way of hypothecation of all the
Borrower's moveable assets, both present and
future, save and except the project assets
iii)
A first charge on Borrower's receivables.
iv)
A first charge over all the accounts of borrower ,
including without limitation, Escrow a/c, retention
a/c and other bank accounts
v)
Pledge of shares held by consortium aggregating to
51% of paid up and voting equity share capital and
51% of paid up preference share capital of
borrower during the construction period, which
shall be released by Security Trustee from pledge
so created on occurrence of COD
vi)
A first charge on all the intangible assets of the
borrower.
vii) An irrevocable and unconditional corporate
guarantee of the Promoter guaranteeing shortfall in
payment of termination payment by NHAI, upon
termination of concession agreement due to
concessionaire event of default during any time up
to the COD.
1 t of 1 Li
Status of the project
• The project has achieved COD on 22.09.2011
•
•
•
•
against
scheduled COD of 08.12.2008.
Due to the delay in project completion because of various
reasons like land acquisition, forest clearance etc , the
project has suffered cost overrun.
The company is presently charging toll only for length of
39.814 km and balance stretch of 0.986 km is yet to be
provided by NHAI, after which 100% toll can be charged
against existing 75% of actual toll charge. The handing
over is expected within one year.
Further Post-COD, due to delay in infrastructure
developments around the project stretch, the toll collection
is less than the estimated value.
As per provisional balance sheet of FY 2015, the total toll
collection is Rs 24.88 crore.
Avenues for Recovery:-
a) The project is generating cash flows, which may increase once balance stretch
of 0.986 km land is handed over by NHAI, as the toll rate will increase by
25%
b) The project may also be re-structured for which the promoter has given a
proposal where he has indicated that they will be able to repay the full debt if
the existing repayment is rescheduled till 2025-26 at an interest rate of 10.50 %
.
p.a..
atleast
c) As the project has achieved COD, the lenders have a protection to get
90% of debt due in the event of termination by NHAI due to concessionaire
event of default.
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M/s: MORA TOLLWAYS LIMITED
Project Description
Concessioning
Authority
Concessionaire
Group
Concession Period
TPC & means of
Finance
Bank/FIs involved
(Z in Crore)
SCOD
Securities Available
Augment the existing road from km 0.000 to km 116.760
(approximately 117.00 km) on the Mohania-Ara section of
NH-30 in Bihar by Four-Laning on design, build, finance,
operate and transfer (DBFOT) (Toll) basis.
Bihar State Road Development Corporation Limited
(BSRDCL)
Atlanta Group
25 years from appointed date i.e. 14 10.2013
Rs in crore
Component
700
Debt
702
Equity
298
Grant
1200
Total
Principal
Rs
in
Sanctioned
Name of Lender
Outstanding in Rs
crore
crore
88.88
200.00
Union Bank of
India (Leader)
89.97
200.00
Bank of Baroda
46.49
100.00
Punjab and Sind
Bank
44.87
100.00
Oriental Bank of
Commerce
35.91
80.00
IIFCL
9.41
20.00
Dombivilli Nagari
Sahak
315.53
700.00
Total
20.03.2016
A first mortgage and charge on all the borrower's
i)
immovable properties, both present and future.
A first charge on all the borrower's tangible
ii)
moveable assets, including but not limited to all
current/non-current assets, moveable plant and
machinery, furniture, fixtures, vehicles both present
and future, save and except project assets
A first charge on all borrower's bank accounts
iii)
A first charge on all the intangibles of the borrower.
iv)
Irrevocable and unconditional guarantee from the
v)
Sponsor (Atlanta Infra Assets Limited)
Pledge of shares held by sponsor aggregating to
vi)
51% of paid up and voting equity share capital of
borrower until COD.
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Physical/Financial
Progress
Physical Progress as per IE of BSRDCL-22.60%
Physical Progress as per LIE-28.46%
Financial Progress- 47% as per CA certificate dated
23.12.2014
Status of the project
• The project was bid keeping in mind the facilities of
aggregates from enumerated stone quarries in possession of
Government of Bihar, which was later not awarded. This led
to an increase in cost for procuring the aggregates from
neighbouring states and the issue could not be resolved, for
which there was no provision of extra lead of aggregates in the
Concession Agreement
• In August 2014, the concessionaire issued notice to the
Authority by calling upon the Authority to cure the defaults
including non-payment of tranche of grant of Rs 105,785
crore, non payment of additional cost for the procurement of
longer leads amounting to Rs 5.63 crore, failing to procure
entire right-of-way within 90 days from appointed date
(14.10.2013), etc.
• Subsequently, in February 2015, the concessionaire issued
termination notice to the authority citing authority default and
has claimed Rs 600 crore in accordance with provisions of
concession agreement which includes debt due and 150% of
adjusted equity.
• The concessionaire thereafter filed a Writ Petition and
Interlocutory Application in High Court of Patna seeking
relief that the Authority shall pay the termination payment to
the concessionaire.
• Meanwhile in June 2015, authority also terminated the
concession agreement on 10.06.2015, stating concessionaire
default of non-achievement of mile stones.
• However High Court of Patna on 22,09.2015 based on IA by
the concessionaire, has set aside the termination notice issued
by the Authority in June 2015 with liberty to the respondents
to take recourse to dispute resolution as defined in Article 44
of the concession agreement.
Avenues for Recovery:-
a) Through legal process i.e. dispute resolution mechanism under the provisions
of the Concession Agreement.
b) The Lenders have decided to file suit in DRT, against the company/guarantors
for recovery of the debt.
c) To invoke the guarantees available to the lenders.
d) Substitution of Concessionaire.