ICICI Bank in talks to sell Unimark Remedies loan to Edelweiss ARC2 min read . Updated: 22 Aug 2017, 02:18 AM IST
A couple of other ARCs, including Multiples ARC, also evinced interested in Mumbai-based Unimark but the discussions were unsuccessful
ICICI Bank Ltd, a major lender to Unimark Remedies Ltd, is in talks with Edelweiss Asset Reconstruction Co. (ARC) Ltd to sell its loans, according to two people aware of the development.
A couple of other ARCs, including Multiples ARC Pvt. Ltd, have also evinced interested in Mumbai-based Unimark but the discussions were unsuccessful, one of the two people said, requesting anonymity. The discussions with Edelweiss ARC is at a preliminary stage, the second person said on condition of anonymity.
ICICI Bank had last year planned to convert a portion of its loans into equity through the strategic debt restructuring mechanism. It is not clear whether the conversion has taken place. “If part of the debt is converted, Edelweiss will also consider buying the equity through another arm, while the debt is to be bought over by the ARC," said the second person.
Edelweiss Group had recently acquired a portion of the loan book and 26% stake in Adhunik Power and Natural Resources from lenders led by State Bank of India. Edelweiss’s offshore arm had acquired the equity while debt was acquired by the ARC.
Unimark Remedies’s consolidated debt was close to Rs900 crore as of 31 March.
According to data available from the Registrar of Companies (RoC), Unimark reported revenue of Rs320.5 crore in financial year 2014-15 compared with Rs.436.1 crore in the previous year. The firm’s loss widened to Rs84.7 crore in 2014-15 from Rs.74.9 crore in the previous year.
A spokesperson for Edelweiss ARC declined to comment. Mehul J. Parekh, managing director of Unimark Remedies, also declined to answer queries. A mail sent to ICICI Bank remained unanswered.
Founded in 1982 by Mehul Parekh and Sandip Parekh as a drug marketing company, Unimark entered into active pharmaceuticals ingredient (API) space by acquiring manufacturing facilities in Vapi and Ahmedabad. The company entered the US in 2004 and expanded its presence globally by launching formulations, wellness and nutraceuticals products. The company currently has three USFDA approved API manufacturing facilities at Vapi, Khopoli (both in Maharashtra) and Ahmedabad. Unimark has a presence in therapeutic segments such as respiratory, cardiovascular, anti-infectives and central nervous system.
In 2007, Citi Venture Capital International (CVCI) acquired 30% stake in the firm for Rs.113 crore. In 2013, CVCI was bought by another New York-based fund Rohatyn Group. A mail sent to Rohatyn Group seeking comments also remained unanswered.
ICICI Bank had sold its Rs1,000-1,500 crore debt exposure in Essar Steel to Edelweiss ARC last year and Rs1,800-crore exposure in Ballarpur Industries along with Axis Bank in 2017. At present, Edelweiss ARC has a portfolio size of over Rs40,000 crore.
“We believe capital required for the next 4-to-5 years to resolve distressed situations is about Rs30,000 crore to Rs40,000 crore. We ourselves have lined up about Rs10,000 to Rs12,000 crore," Rashesh Shah, chairman and CEO of Edelweiss Group, said in an interview in April.
Indian banks are sitting on a stressed asset pile of close to Rs10 trillion; of this, gross bad loans account for about Rs8 trillion and the rest are restructured loans. Discussions between lenders and ARCs have gathered pace after the referral of 12 accounts to the National Company Law Tribunal for insolvency proceedings, following a Reserve Bank of India directive.
In June, the internal advisory committee of the Reserve Bank of India had recommended 12 accounts totalling about 25% of the gross non-performing assets of the banking system for immediate reference under Insolvency and Bankruptcy Code.