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Stressed assets this week: Jet, Orchid Pharma and Aircel in focus
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With the insolvency courts in recess, activity in the stressed assets segment was slightly subdued in the week gone by. That said, large corporates such as Jet Airways and Essar Steel remained on the radar while debt-ridden Aircel finally found a buyer. Here’s a round-up of the top developments:

Jet Airways

Despite the well-heeled Hinduja Group entering the fray to acquire ailing Jet Airways, the grounded airline’s chances of flying again remain slim.

Reports suggest that Jet’s lenders are unwilling to accept the conglomerate’s conditions for a takeover. The Hinduja Group was believed to be sizing up a bid in partnership with UAE-based carrier Etihad Airways, which owns 24% in Jet.

The State Bank of India-led consortium of lenders, which took control of the airline in March, had earlier this month reportedly approached unsolicited bidders including UK-based entrepreneur Jason Unsworth, Mumbai-based Darwin Platform Group and AdiGro Aviation to buy a stake in the airline.

Essar Steel saga continues

Global steel major ArcelorMittal said it would pay Rs 42,000 crore, including a minimum of guarantee of Rs 2,500 crore as working capital, for acquiring debt-laden Essar Steel in an attempt to end the protracted takeover saga.

ArcelorMittal’s lawyer told the National Company Law Appellate Tribunal (NCLAT) that the firm would also infuse Rs 8,000 crore in the company after the buyout.

The firm also argued that there have been eight attempts by the Ruias, Essar Steel’s promoters, to create hurdles in the insolvency resolution process which has now dragged on for more than 600 days.

Orchid Pharma attracts bids

Orchid Pharma Ltd attracted takeover interest from three suitors, including two drugmakers, re-igniting hopes of a revival for the debt-laden company after a previous bankruptcy resolution process failed.

Two people close to the development told VCCircle that Dhanuka Laboratories Ltd and Covalent Laboratories Pvt. Ltd are among the three applicants which have been selected. The third name could not be ascertained.

The Chennai-based drugmaker owes a total of Rs 3,200 crore to a consortium of 24 banks.

Last year, US-based Ingen Capital Group had emerged as the winner of the bankruptcy resolution process for Orchid. But it failed to inject the funds that it had promised, prompting the NCLT to annul its offer.

Massive haircut for Aircel’s lenders

Telecom firm Aircel Ltd has found a buyer in UV Asset Reconstruction Company Ltd. As part of the bankruptcy process, Aircel’s lenders have approved UV ARC’s offer of Rs 150 crore ($21.4 million) for units Aircel Cellular Ltd and Dishnet Wireless Ltd.

This means lenders will take a haircut of over 99%. The debt-laden telecom firm owed Rs 19,788 crore ($2.79 billion) to its financial creditors as of February this year.

The development comes months after VCCircle reported that Delhi-based UV ARC had emerged as the front-runner to buy the telecom operator.

IL&FS’ wind assets

Debt-ridden Infrastructure Leasing and Financial Services (IL&FS) said that Japan’s Orix Corp had expressed interest in buying out the remaining 51% stake in IL&FS’ wind energy assets.

Orix Corp plans to exercise its right under the terms of an existing agreement that allow the Tokyo-headquartered firm to match the price offered by the highest bidder for buying a stake in the wind power plants, IL&FS said.

In April, GAIL (India) Ltd  hadoffered Rs 4,800 crore ($683.01 million) for IL&FS’ power plant portfolio, emerging as the highest bidder for its wind assets.

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