Who is bidding for Gammon India's debt from PNB?

CFM ARC is the anchor bidder for the ₹514 crore debt Gammon India owes to Punjab National Bank.

What is a Swiss auction in this context?

PNB is holding a Swiss auction to find a better price for Gammon India's debt on an all-cash basis.

What is CFM ARC's strategy regarding Gammon India's debt?

CFM ARC aims to consolidate Gammon India's debt, possibly by leveraging real estate assets and tax benefits.

Home / Business and Economy / CFM ARC Bids for Gammon India Debt

CFM ARC Bids for Gammon India Debt

23 Feb

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Summary

CFM ARC is the anchor bidder for Gammon India's debt.
PNB is conducting a Swiss auction for the debt.
CFM aims to consolidate Gammon's debt for resolution.

CFM ARC has positioned itself as the leading bidder for the ₹514 crore debt owed by Gammon India Ltd to Punjab National Bank (PNB). PNB has initiated a Swiss auction to explore opportunities for a higher price on this all-cash offer, which currently stands at ₹140 crore from CFM ARC. This offer implies a substantial haircut of about 73% for PNB on its exposure to Gammon India.

Gammon India's total debt is reported to be around ₹3,800 crore, and it has been a non-performing asset in PNB's books for over a decade. Recovery from EPC companies is often challenging due to limited tangible assets and ongoing legal disputes over payments.

CFM ARC's strategy appears to involve consolidating Gammon's debt, potentially leveraging real estate assets and tax benefits from accumulated losses. Bidders looking to challenge CFM's offer must bid at a 5% markup in an electronic auction scheduled for Wednesday, with subsequent bids in multiples of ₹7 crore. CFM has already acquired about ₹684 crore of Gammon's debt from IDBI Bank, and success in the PNB auction would give it a significant portion of the company's debt.

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