Consortium of lenders invites bids to sell JBF Petrochem’s forex debt

A consortium of lenders led by IDBI Bank has invited bids by the end of this month to sell the foreign currency debt of JBF Petrochemicals worth $463.38 million (Rs 3,455.43 crore). The outstanding debt of JBF Petrochemicals includes $307.30 million in external commercial borrowing (ECB) and $156.08 million of foreign currency term loans (FCTL).

The consortium of lenders includes EXIM Bank, Bank of Baroda, Indian Overseas Bank, and Union Bank of India. Interested bidders have to submit their expression of interest (EoI) and Non-Disclosure Agreement by July 15, while e-auction will be held on 2 August, 2021.

As on September 30, 2020, JBF Petrochemicals owed $66.82 million to EXIM Bank, $33.49 million to Union Bank of India and $55.77 million each to Indian Overseas Bank and Bank of Baroda. The IDBI Bank has to recover debt worth $251.53 million.

BOB Capital Markets (BOBCAPS) has been mandated by the lenders to seek EoI for sale under regulatory guidelines issued by the Reserve Bank of India. The lenders have made an eligibility criteria for the prospective bidders to acquire the ECB and the FCTL exposures.

Bidders interested in acquiring the ECB loans must adhere the regulatory framework for external commercial borrowings in India. While, banks, non-banking finance companies, asset reconstruction companies and other entities permitted by the Reserve Bank of India are eligible for acquiring the foreign currency term loans. JBF Petrochemicals, in which global private equity giant, KKR has an exposure of Rs 1,000 crore, was sent to the National Company Law Tribunal (NCLT) for debt resolution after it defaulted on its loans. JBF Petrochemicals is a step down subsidiary of BSE listed JBF Industries, and it owes around Rs 5,000 crore to the lenders.

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