Assets Care & Reconstruction Enterprise Ltd. (ACRE), an Ares Management-backed asset reconstruction company, is set to acquire a Visa Steel loan of INR 4,110 million from Union Bank of India after no other bidders participated
in the Swiss Challenge process. Union Bank held an auction on August 28 after the binding offer by ACRE triggered a Swiss challenge auction. ACRE was declared the successful bidder in the absence of counteroffers at the
auction. The offer of upfront cash of INR 1,430 million by ACRE equates to a recovery of 35%. Union Bank of India had lowered the reserve price to INR 1,430 million, compared to the previous quarter's INR 1,600 million, after it failed to get any bids at this price. With this acquisition, ACRE, which has been aggregating Visa Steel loans over the past couple of years, will see its share of debt increase to around 60%. Earlier this year it acquired State Bank of India's INR 6,970 million loan and held around 46% of the company's debt. To exercise control over the debt resolution process in any company undergoing restructuring, an acquirer looks to own a minimum of 66% of the company's debt. This is crucial as under the Insolvency and Bankruptcy Code, a resolution plan needs a 66% majority vote among lenders to be approved. Both ACRE and Union Bank of India did not respond to requests for comment until 29 August 2023 press time.