NARCL Offers Rs 474 Crore to Take Over Debt of Gayatri Projects Amid Ongoing Lender Talks

The National Asset Reconstruction Company (NARCL) has made a Rs 474 crore offer to take over the Rs 9,150 crore debt of Gayatri Projects, a construction and engineering firm. This comes as banks are still negotiating with the company’s promoters for an all-cash one-time settlement.

Banks had started the liquidation process for Gayatri Projects in January last year. However, the promoters, led by former Rajya Sabha MP T Subbarami Reddy and his family, have also proposed a settlement to repay the debt under the Insolvency and Bankruptcy Code (IBC).

The promoters’ offer includes a commitment to cover any losses that lenders might face due to bank guarantees. However, banks are pushing for a quicker repayment timeline, with a preference for receiving the money within 90 days instead of the 180 days offered by the promoters.

The NARCL’s offer includes an additional benefit for banks if any claims are formally recognized later. Banks are now considering both the NARCL offer and the promoters’ proposal to make the best decision.

For context, the promoters’ Rs 750 crore offer would only recover about 8% of the total debt for creditors. Canara Bank and Bank of Baroda are the largest creditors, with dues of Rs 1,911 crore and Rs 1,382 crore, respectively.

NARCL has not commented on the offer yet.