In a recent development, the State Bank of India (SBI) has successfully auctioned off the principal loan outstanding worth Rs 341 crore from bankrupt Atibir Industries to CFM Asset Reconstruction Company for Rs 250 crore through a Swiss challenge auction held on Friday.
SBI's recent sale of the principal loan outstanding to CFM Asset Reconstruction Company for Rs 250 crore through a Swiss challenge auction held on Friday is an all-cash transaction that has resulted in a recovery of 73 paise on a rupee of the principal amount outstanding for SBI. This means that SBI was able to recover only 73% of the total outstanding amount through this sale.
The bank informed interested bidders that the loan would be auctioned using the Swiss challenge method with an anchor bid.
CFM ARC was the only bidder for this loan portfolio.
At the auction, SBI had specified that any challenger bid must fall within a range of 5% to 15% markup over the base bid. This meant that the minimum markup allowed was Rs 12.50 crore, which is equivalent to 5% of the base bid amount of Rs 250 crore.
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