IOB To Auction Bad Loans In MSME Sector, Aiming For 60% Debt Recovery

Mumbai, Feb 5 (KNN) The Indian Overseas Bank (IOB) is set to conduct an auction of bad loans within the Micro, Small, and Medium Enterprises (MSME) sector, aiming to achieve a substantial 60 per cent debt recovery.

The bank has identified 41 accounts in this segment, totaling Rs 208 crore, and is actively seeking buyers to participate in the auction.

The recovery strategy involves inviting potential buyers to submit offers, with a specified structure of 20 per cent in cash and 80 per cent in Security Receipts (SR).

Expressions of interest from potential buyers must be submitted by February 9, and the e-bidding process is scheduled for February 21.

Bidders are encouraged to provide a 5 per cent mark-up on the base bid, which consists of 20 per cent cash and 80 per cent SR, with preference given to bids with a higher cash component.

The cash portion of the bid is set at Rs 26.40, complemented by the SR portion of Rs 105.60, culminating in a total recovery expectation of Rs 125 crore. This represents 60 per cent of the outstanding book value of the bad loans in question.

Additionally, IOB has established an initial amount of Rs 132.00 crore for counter bids, reflecting a 5.34 per cent mark-up from the binding bid amount of Rs 125.3 crore, basis the prescribed 20 per cent cash and 80 per cent SR structure.

(KNN Bureau)