ITC Limited, Vidya Polymer, and Shanti GD Ispat & Power Limited have submitted resolution plans for Shakti Bhog food which has defaulted on Rs 7,000 crore of bank loans, the Economic Times (ET) reported.
Shakti Bhog is a wheat flour manufacturer that is based out of north India. It is currently facing insolvency proceedings at the National Company Law Tribunal (NCLT), the ET report said.
ITC Limited is looking to acquire the company's brands whereas Vidya Polymer, and Shanti GD Ispat & Power Limited are bidding to take over the entire company, the report said.
Union Bank of India, Punjab National Bank and Standard Chartered Bank are the other major lenders to the defaulting company.
According to the report, the bankers may have to take a haircut of up to 90 per cent as the recoveries from the resolution offers are unlikely to cross Rs 500 crore, the report said.
Quoting a company executive the ET report said that currently there is hardly any asset left in the company and it is only the brand value that counts.
Shakti Bhog that was admitted for insolvency proceeding in September 2022, had secured loans from the State Bank of Mysore, State Bank of Patiala, State Bank of Bikaner and Jaipur, and State Bank of Travancore.
The loans came under the ambit of the State Bank of India (SBI) after these associate banks were amalgamated with it in 2017.
According to the report, SBI's total loan stands at Rs 4,700 crore to the company.
There are a total of 13 banks and asset reconstruction companies that have loaned money to the Shakti Bhog.
Kewal Krishan Kumar who was the former chairman and managing director at Shakti Bhog is under investigation from the Central Bureau of Investigation and the Enforcement Directorate over bank loan defaults.