1 IFCI LTD. OFFER DOCUMENT FOR SALE OF NON PERFORMING ASSETS Issued by IFCI March 14, 2014
2 Sal e of Non-Per for mi ng Assets IFCI Ltd. invites offers from ARCs, Banks, NBFCs and FIs, for the proposed sale of its Non Performing Assets (NPAs) primarily comprising of 12 accounts with total aggregate dues of approx. Rs crores. The sale shall be on CASH basis. The assets will be sold on stand alone basis and on basket basis also. The sale shall be on AS IS WHERE IS AND WHATEVER THERE IS BASIS. Eligible prospective investors/bidders are requested to submit the offers in sealed envelopes by, 3:00 PM, on addressed to NPA Sale Committee, IFCI Tower, 61, Nehru Place, New Delhi The tender documents can be downloaded from IFCI s website at IFCI reserves the right to reject any / all bids or adjourn/postpone/cancel the sale/modify any terms and conditions of the sale without any prior notice and or without assigning any reasons thereof. Kindly refer to for further details. For any clarification / information, interested parties may contact the office of IFCI Ltd. at 61, Nehru Place, New Delhi Phone Place : New Delhi Dated : March 14, 2014
3 Tabl e of Conte nts S.No. Description Page No. I II III IV V VI VII VIII IX X XI XII Disclaimer Introduction Eligible Participants Schedule of Sale Process Due Diligence and Data Room Offer Submission Offer Opening and Evaluation Legal Documentation and File Transfer Default in Payment by the successful Participants Force Majeure Governing Laws/Jurisdiction Terms and Conditions
4 Disclaimer IFCI Ltd. invites Offers for sale of its Non Performing Financial Asset(s) accounts (NPAs). This Offer Document (OD) contains the terms & conditions on which Offers are being invited for sale of NPAs. This OD for sale of NPAs of IFCI Ltd. together with the information provided by the Institution comprises the only information package which is being made available to the Participants for sale of Non Performing Financial Assets by IFCI Ltd. in accordance with the details contained herein. This OD is for the exclusive use of the Participants and is to be used solely in accordance with the terms set out in the Non Disclosure Agreement that has been entered into between the respective Participants and IFCI Ltd. It shall be noted that neither IFCI LTD. nor its employees/associates make any representation as to the correctness, validity or adequacy, sufficiency or otherwise of any such information provided. The Participants should do their own due-diligence to verify the same. IFCI LTD. does not undertake responsibility for adequacy or sufficiency of information and documents related to financial assets in respect of NPA(s) identified for sale. The Participants should not limit or restrict their due-diligence to the documents for assessing the complete risk or even for evaluating the NPA account(s). The delivery of this OD does not constitute an Offer to sell, or a solicitation of an Offer to buy any NPA(s). The delivery of this OD to any person does not confer on such person any right or entitlement to participate in the sale process described herein and does not obligate IFCI LTD. to accept any Offer, application or request for information from any person. IFCI LTD. reserves the right to reject, in whole or in part, any applications, which are submitted to it and any offers which are offered to it. It is within the sole discretion of IFCI LTD. to select persons and /or entities which may participate in the sale process described herein, including the acceptance of any Offer. This Bid Document has not been filed, registered or approved by any regulatory or judicial authority. Recipients of this document should inform themselves of and observe any applicable legal requirements. IFCI LTD. and its representatives will not be responsible for compliance with the same. Participants should note that they must have the capacity to enter into and conclude the sale process in compliance with all applicable laws. IFCI Ltd. also reserves the right to withdraw any account from the above portfolio/npa Sale at its sole discretion. II. Introduction 1. IFCI LTD. invites Offers for sale of Non-performing Financial Asset(s) [NPA(s)] accounts.
5 2. Participants can submit their Offers for entire bucket or on case to case basis. 3. Interested Parties should submit their Offers for purchase of NPAs on CASH BASIS only. 4. The sale of NPAs is on as is where is & whatever there is basis and on without recourse to IFCI LTD. The cut-off date for the purpose of sale is the date of opening of the Data room. IFCI LTD. shall have the sole right to shortlist the Participants. 5. On receipt of the Non-Disclosure Agreement (NDA) duly executed, the eligible Participants (herein after referred to as Participant) will be provided brief details of the NPAs on sale. Such information is furnished on the basis of the available data and shall not be deemed to be a representation of IFCI LTD. about quality of assets. Participants shall conduct their own due diligence, investigation, analysis and independent verification. 6. Participants may address all communications or enquiries relating to the NPAs, the sale process or this Bid Document in writing to; NPA Sale Committee, IFCI Ltd., IFCI Tower, 61, Nehru Place, New Delhi III: Eligible Participants 1. The Eligible Participants are Banks, Financial Institutions, Asset Reconstruction Companies, eligible Non Banking Financial Companies duly registered & mandated by RBI for purchase of Non-Performing Financial Assets (NPAs). 2. Participants should submit documentary evidences (RBI approval, registration etc.) in support of their eligibility to buy such assets from IFCI LTD. Participants should also submit their Annual Report for and along with the name of the shareholders and their shareholdings. However, the Participants should themselves ensure that they are eligible for buying the NPAs. 3. The shortlisted eligible Participants, who have executed the NDA, shall be provided the brief information of the NPAs on sale and date allocated for the data room visit.
6 IV: Schedule of Sale Process The indicative time frame is as under and subject to change of as per IFCI s discretion for which reference may be made from time to time to the website of IFCI Ltd. Sl.No. Activity Date & Time 1 Release of Notice Receipt of EoI for participating in the sale of NPAs to Execution of NDA onwards 4 Data Room Visit & Completion of Due Diligence Exercise to (including and ) From 10:00 AM to 8:00 PM except on wherein it is open only till 2:00 PM 5 Last date for receipt of offers/sealed tenders from Participants 6 Offer Opening & negotiation for further improvement - Date & Time 7 Declaration of Highest Bidder and Issue of LOA by IFCI LTD. (subject to approval) of Competent Authority of IFCI LTD.) 8 Receipt of 50% of Assignment consideration including EMD (Subject to Offer Document Conditions and change as per discretion of IFCI. Due intimation of the same will be given.) Upto 3:00 PM on From 3.00 PM till 5.00 PM on and (tentative) Subject to change as per discretion of IFCI. Due intimation of the same will be given (tentative) Within 2 days from the issuance of LOA 9. Receipt of remaining 50% of Assignment consideration (Subject to Offer Document Conditions) within 15 days from issuance of LOA
7 V: Due Diligence & Data Room 1. For the sale of NPAs, IFCI LTD. would open data rooms at following place: IFCI Ltd., IFCI Tower, 16 th Floor 61, Nehru Place, New Delhi However, IFCI LTD. may at its sole discretion, open additional data rooms at a different place that it may decide. Eligible Participants shall be communicated the dates and venue of their visit to data room allotted to them. The data room will remain open from 10:00 AM, to 2:00 PM, (including and ) from 10:00 AM to 8:00 PM (except wherein it will be open till 2:00 PM) every day for carrying out due diligence. The timings are subject to change at the discretion of IFCI. Only authorized representatives of eligible participants, who are bound by NDA, will be allowed access the Data-Room on the date and venue to be allotted and communicated to Eligible Participants. 3. IFCI LTD. does not make any representation as to the correctness, validity or adequacy, sufficiency or otherwise of any information provided. The Participants should do their own due-diligence to verify the same. IFCI LTD. does not undertake responsibility for adequacy or sufficiency of information and documents related to financial assets in respect of NPA(s) accounts. The Participants should not limit or restrict their due- diligence to the documents for assessing the complete risk or even for evaluating the NPA accounts. It is further submitted that since in some cases because recovery suit has been filed, if prior permission of any Court is required for transfer of the debt, the same shall be taken after declaration of the highest bidder. 4. The Participant shall submit any queries that they may have pursuant to the due diligence by to the below mentioned Officer(s) designated for this purpose: Ms. Alisha Mukerji, Manager (Mobile No id: Mr. Sudhir Kumar, AGM (Mobile No id: Ms. Sapna Jain, AGM (Mobile No id: 5. IFCI LTD. shall attempt to respond to queries received on or before the last date of scheduled data room visit. Any queries received after the said date shall not be
8 entertained. IFCI LTD. shall attempt to reply to the Queries raised by the Participants, as far as practicable. However, IFCI does not undertake to respond to all the Queries raised by the Participants. 6. Each Participant and its representatives must agree to comply with the terms of NDA. The Participants shall not be provided photocopies of any documents or softcopies of any documents in the data room either in case of portfolio sale or in case of sale of single NPAs. Participants or their authorized representative are not allowed to carry any documents or soft copies of any documents outside the Data Room/Department of IFCI Ltd. Any violation in compliance of the same may result in a participant being eliminated from participating in the sale process and/or IFCI LTD. pursuing remedies against such Participant. VI: Offer Submission 1. The Participants are required to submit their Offers for the entire NPA accounts (in one Bucket or on case basis) on sale in sealed envelopes mentioning Offer for Purchase of NPA (Entire Bucket) or (Stand Alone Basis) Accounts of IFCI LTD addressed to the NPA Sale Committee. 2. The Offers are being invited for the NPAs from the Cut-Off Date, the Cut-Off date being the d a t e of opening of the Data Room. 3. All Offers should be submitted in sealed envelopes and hand delivered to the NPA Sale Committee, IFCI Ltd., IFCI Tower, 61, Nehru Place, New Delhi on or before by pm. 4. As specified by IFCI LTD. the Offers submitted must be accompanied by the Earnest Money Deposit ( EMD ) of 10% of the amount offered by way of a Demand Draft/Pay Order only, drawn in the name of IFCI LTD. payable at Delhi only. The EMD shall not carry any interest. The EMD shall be returned (without any interest thereon) to the unsuccessful Participants within 48 working hours after opening of offers. The EMD shall be adjusted against the Sale Consideration payable by the Successful Participants. The DD/PO should be placed in a separate envelop inside the envelope containing offer letter marking EMD. In case the successful Participants fail to adhere with the terms and conditions of the sale, IFCI LTD. may forfeit the EMD. 5. The Offer(s) shall be accompanied by a Power of Attorney of the authorized representative supported by necessary Board Resolution.
9 6. The Offers and all related correspondence and documents should be written in the English or Hindi language. 7. The Offer shall be typed or written in indelible ink and the Participants and/or its Authorized Signatory shall initial each page. All the alterations, omissions, additions, or any other amendments made to the Offer shall be initialed by the person(s) signing the Offer. 8. The Participant shall not be entitled to withdraw or cancel his Offer once submitted. Offers shall remain valid for a period of 60 days from the date of submission of Offer. 9. The sale of NPAs on case basis/ bucket, it is subjected to the approval of competent authority of IFCI LTD. IFCI LTD. also reserves the right to reject any offer without assigning any reasons thereto. 10. The Participants are required to and also exercise utmost good faith, due care and diligence in preparation and submission of their Offer and must ensure that all information provided therein is accurate and complete. 11. By virtue of submission of the Offer, it shall be deemed that the Participants have conducted their own independent due diligence at their own costs including verifying various legal proceedings as well as ascertaining the known and unknown liabilities, encumbrances and any other dues from concerned authorities or stakeholders to their satisfaction before submitting the Offer. Any Offer made shall be deemed to have been submitted after complete satisfaction of Participants thereto and/or all claims there against and due proper inspection and hence the Participants shall not be entitled to make any representation or raise any query/ objection to IFCI LTD. as to the title or condition of the Secured Assets or any part thereof or any liabilities/ encumbrances/dues/taxes/levies irrespective as to whether disclosed or undisclosed. Participants are expected to submit their Offer with independent professional, financial and legal advice for studying,assessing and analyzing the Financial Assets in respect of NPA accounts and value thereof before submitting their Offers. IFCI LTD. does not assume any responsibility for the same. 12. IFCI LTD. reserves the right to reject any Offers that does not conform to the conditions stipulated herein. 13. IFCI LTD. also reserves the right to negotiate with the successful Participant for further improvement in the offer and may conduct inter se bidding amongst the bidders.
10 VII: Offer Opening and Evaluation 1. The envelopes will be opened on after 3:00 PM at the office of IFCI Ltd., IFCI Tower, 61, Nehru Place, New Delhi IFCI may announce the name of the Participants whose Offer price is highest without disclosing the Offer amount on Evaluation of the Offers shall be at the sole discretion of IFCI. 4. Conditional & Contingent Offers shall be liable to be disqualified by IFCI Ltd. 5. IFCI Ltd. also reserves the right to disqualify any Offer if the Sale Consideration/Offer is expressed in a currency other than Indian Rupees. 6. Offers must be signed by the Participants (and each page thereof initialed by the Participants). Absence of required duly authorized signatures would render the submission invalid. 7. IFCI Ltd. may negotiate with the successful participant for further improvement in the offer. VIII: Receipt of Payment EMD being 10% of the offer price has to be deposited by way of Cheque/DD by the Participant (s) along with their offer. On declaration of the successful/highest bidder, the bidder has to deposit 50% of the final bid amount (including EMD) immediately within two days from the issuance of LoA. Balance sale amount has to be paid within 15 days where after sale letter shall be issued and assignment deeds shall be executed. Only EMD of the successful bidder shall be encashed by IFCI. The EMD of the other unsuccessful bidders shall be returned forthwith. IX: Legal Documentation and File Transfer
11 1. Sale of NPAs to the Successful Participants shall be effected by execution of the necessary and appropriate Assignment Agreement(s) in favour of the Successful Participants, upon receipt and realization from the Successful Participants of the entire Sale Consideration. The execution of the Assignment Agreements shall be only in the form provided and finalized by IFCI Ltd. However, IFCI Ltd. shall circulate the draft of the Assignment Agreement to the Highest Bidders and invite their views/suggestions on the same. However, IFCI Ltd. shall at its sole discretion finalize the draft of the Assignment Agreement before the date of submission of the Offers as stated herein above. Submission of the Offer shall be construed as unconditional acceptance of the same. Please note that after the draft of the Assignment Agreement is finalized by IFCI Ltd., there shall be no deliberations, negotiation on the draft of assignment agreement and the drafts are not subject to discussion and modifications, except where the nature of transaction requires change in the draft. The Deed of Assignment (DoA) shall be executed within a period of three months from the date of receipt of entire sale consideration. In case buyer sought any extension for execution of DoA, the same shall be with the prior approval of IFCI Ltd.. 2. As from the date of execution of the Assignment Agreements as aforesaid in favour of the Successful Participants/Assignees as aforesaid, all the rights and corresponding duties and obligations of IFCI Ltd. in respect of the subject case shall vest in the Assignee. Accordingly, IFCI Ltd. shall not continue attending/ pursuing / defending to the legal cases which may have been filed in relation to the subject case. 3. All available records including the available documents/files relevant to the NPAs will be made available by IFCI Ltd. to the Successful Participants only after the execution of the Assignment Agreement and on receipt of the Sale Consideration in full. It shall be sole responsibility of the Successful Participants, to collect the documents/records/files from the various offices of IFCI at his own cost within a period of 30 days from the date of execution of the Assignment Agreement. If any document has been executed/deposited with IFCI Ltd. on behalf of other institutions/banks, such documents shall be handed to any of such participating institution/bank or released by IFCI Ltd. only after the receipt of NOC from all concerned institutions/banks/parties. 4. IFCI Ltd. reserves its right to withdraw any account from the bucket of NPA accounts on sale before the submission of offers from the Participants / bidders. 5. IFCI Ltd. also reserves its right to negotiate for further improvement of the offer price with the Successful Participant and may negotiate for further improvement, at its sole discretion, with the Successful Participant for further improvement in the offer.
12 X: Default in payment by the successful Participants In case the Sale Consideration is not paid in terms of the LoA and the Offer Document, the sale of the NPA(s) sold to the respective Successful Participants would stand cancelled and all payments including Earnest Money Deposit (EMD) deposited by the Successful Participant(s) will stand forfeited. X: Force Majeure IFCI Ltd.shall not be liable for any failure or delay in performance due to any cause beyond its control including fires, floods, strikes, go-slow, lock-out, closure, dispute with staff, conditions, war, riots, epidemics, political upheavals, Governments actions, civil commotion and breakdown of government machinery. XI: Governing Laws/ Jurisdiction Disputes, if any, shall be subject to exclusive jurisdiction of Courts in Delhi only. XII: Terms and Conditions 1. The Successful Bidder shall bear the expenses related to stamping, registration or any other incidental expenses. 2. All costs, expenses and liabilities incurred by each Participants in connection with the Transaction, including (without limitation) in connection with Due Diligence, preparation and/or submission of the Offer, including fees and disbursements of its own advisors, if any, shall be borne and paid by such Participants, whether its
13 Offer is accepted or rejected for any reason, and IFCI does not assume any liability whatsoever in this connection. 3. Any discussions or any clarifications, information sought or divulged with respect to the Offer will not constitute an invitation or commitment by IFCI Ltd. to enter into any intent, motive, agreement, undertaking or covenant with the Participants nor shall IFCI Ltd. be liable to consummate deal with any Participant on the basis of such discussion, negotiation or information. 4. IFCI Ltd. may, at any time and for any reason, without giving any reason thereof, change/extend the deadlines/time-lines and shall communicate such change/extension individually to each Participant. 5. The Successful Participants shall be solely and absolutely responsible for completion of all statutory, regulatory and other compliances for the said purpose including incurring of any costs, charges and expenses and payment of fees and duties (including the adjudication, stamp duty and registration fee and other similar levy payable and whether payable in one or more states or jurisdictions), statutory and otherwise. 6. The Successful Participants shall be required to give an indemnity and keep IFCI Ltd. indemnified and save harmless, against any and all losses, damages, liabilities, suits, claims, counterclaims, actions, penalties, expenses (including attorney fees and court costs and any expenses incurred by I F C I Ltd. for the enforcement of this indemnity), which IFCI Ltd. may suffer as a result of any deficiency in respect of adjudication of stamp duty, payment of the same on the Assignment Agreements or Transfer instrument to be executed in favour of the Successful Participants by IFCI for assignment of the Financial Assets in respect of NPA accounts. 7. IFCI Ltd. reserves its right to cancel the Process at any stage before execution of Assignment Agreement and in that event, in absolute discretion, to follow a different method for sale/ transfer of the financial assets which may not be mentioned above. Such action/ decision in this behalf shall be final and binding on all the Participants(s). 8. IFCI Ltd. reserves the right to accept/reject any Offer without assigning any reasons at its discretion and reserves the right to call off the process. IFCI's decision in this regard shall be final and conclusive. 9. If by the terms of Sale, any act would be required to be performed on or within a period ending on a day, which is not a Business Day, then it shall be performed, on or by the immediately succeeding Business Day.
14 10. In the event of any dispute and /or difference on the point of meaning or definition of any particular word used in this document or, in respect of interpretation of any clause of this Offer Document as a whole or, in respect of sequence of events mentioned therein, decision of the NPA Sale Committee, IFCI Ltd. shall be final and binding on all the parties concerned. 11. IFCI may, at its sole discretion, reserves the right to modify the terms of sale, addition/withdrawal of cases, change in tranche composition, at any stage without assigning any reason. IFCI reserves the right to reject and/or cancel or defer the sale of the non-performing assets at any stage without assigning any reason. 12. No interested party or any representatives will have any contact with a borrower or owner or operator of any security for the NPA in connection with any inspection or otherwise. 13. Participants should note that they must have the capacity to enter into and conclude the sale process in compliance with all applicable laws. The participants are further required to submit Audited Balance Sheets for the last three years. 14. The Successful Participants shall be required to give an indemnity and keep IFCI indemnified, against any and all losses, damages, liabilities, suits, claims, counterclaims, actions, penalties, expenses (including attorney s fees and court costs and any expenses incurred by IFCI Ltd. for the enforcement of this indemnity), which IFCI Ltd. may suffer as a result of any order / judgment / directions of any court/ authority/tribunal/forum in respect of any action taken by the Bank after the sale of NPA accounts. All liability arising in future in connection with the NPA accounts being sold will be of the purchaser of the NPA accounts, irrespective of the fact/s that the said liability/ies is connected with the action taken place prior to the sale of NPA accounts. IN WITNESS WHEREOF, the Parties hereto have executed these presents the day, month and year first hereinabove written.. For and on behalf of (_ ) For and on behalf of IFCI Ltd.