Lenders to Mumbai Metro One, which connects Versova to Ghatkopar, are in an advanced stage of selling their debt to the government-owned bad loan aggregator, said people with knowledge of the matter.
The National Asset Reconstruction Company (NARCL) has offered ₹1,063 crore to acquire Mumbai Metro One (MMOPL)’s principal outstanding debt of ₹1,226 crore, the people said.
NARCL’s offer – which involved 15% cash and remaining in the form of security receipts – to five domestic lenders triggered a Swiss challenge auction. The security receipts will be redeemed upon recovery of the loans, and the government guarantees any shortfall in recovery.The NARCL offer did not include the foreign currency loans on the books of Mumbai Metro One. It had raised $63.4 million in external commercial loans from the India Infrastructure Finance Company (UK).
Domestic lenders did not receive any counter bid for the Swiss auction; however, the loan is still not assigned to the winning ARC, people said.
The government-backed bad bank is considering an option to restructure the debt of Mumbai Metro One, a third source said.
Mumbai Metro One is a 74:26 joint venture (JV) between Anil Ambani-owned Reliance Infrastructure and the Mumbai Metropolitan Region Development Authority (MMRDA), an apex governmental body for planning and coordinating development activities in Mumbai.
This was the first metro project awarded in the country on a public-private partnership (PPP) basis which entailed the design, financing, construction, operation and maintenance of about 12 km of elevated metro line operating between Versova and Ghatkopar with 12 stations en route.
Last year, the State Bank of India and IDBI Bank had separately filed a petition at the National Company Law Tribunal Mumbai bench to admit Mumbai Metro One for corporate insolvency for recovery of ₹416 crore and ₹133 crore, respectively. However, the NCLT has not yet admitted the company for resolution under corporate insolvency.Mumbai Metro One makes over 400 trips daily, serving several hundred thousand passengers.
