Banks eye better CG Power offer
Lenders to CG Power and Industrial Solutions Ltd on Wednesday asked interested entities to better an offer made by Tube Investments of India Ltd for a majority stake in the stressed power equipment maker, in an attempt to derive greater value from the sale.
Murugappa Group-led Tube Investments had agreed to invest ₹700 crore in the company for a 56.61% stake. If the Tube India bid is finally accepted, lenders will recover only about 45% of their loans outstanding, said a person aware of the development.
This has prompted banks to seek proposals from other interested parties under the Swiss Challenge method that throws open a bidding process to entities that want to offer a better price for the asset. Banks are hoping this will help them recover more than what Tube Investments has offered for CG Power. Tube India will still be allowed to better the highest offer discovered in the new bidding round.
