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HDFC, after the merger with HDFC Bank, is considering a one-time settlement offer from promoter DP Jain for the sale of two Radisson Blu hotels in Ghaziabad. The promoter has proposed Rs.315 crores, while Prudent ARC has submitted a binding offer of Rs.311 crores for the properties. HDFC is currently evaluating these offers for the potential settlement.
The outstanding loan for these properties is Rs.507 crore. The loans were provided to KAD Housing and KAJ Infrastructure, both promoted by DP Jain and his family. The loan was then categorized as a special mention account (SMA) 2 as of June, indicating an overdue period of 61 to 90 days. Prudent ARC made an initial offer of Rs.311 crores, which triggered a Swiss challenge auction, however, no bidders participated.
If accepted, Prudent ARC's offer would result in a 61% recovery for HDFC. Alvarez & Marsal has been appointed to handle the sale of the real estate portfolio, and in the previous quarter, HDFC received a bid of approximately Rs.1,100 crores from Omkara ARC for another pool of loans, including the hotel properties.
Despite their best efforts to sell the hotel properties, the bid received from Omkara ARC fell short of expectations, leading to the sale not taking place. However, in the previous fiscal year, Assets Care and Reconstruction Enterprise (ACRE) successfully purchased developer loans in two tranches, achieving significant recoveries at approximately 50% of the loan value.
The evaluation of the one-time settlement offer for the Radisson Blu hotels in Ghaziabad continues as HDFC assesses the options available to recover the outstanding loan amount. The outcome of these deliberations will determine the course of action for HDFC in addressing the financial implications associated with the loan default.
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