Union Bank of India on Monday said that offers for stressed power companies are not meeting bank's criteria as it has sought a minimum 20 percent guarantee from the prospective bidders.

In an interview to CNBC-TV18, Rajkiran Rai, chairman and managing director, said that several other stressed power assets will be put for sale to prospective suitors before the August 27 deadline of Reserve Bank of India (RBI).

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Banks to refer four stressed power projects to NCLT by August 27

Rai said he is hopeful of better recoveries from insolvency cases and may seek extension from the regulator on some power projects as banks and companies are struggling to meet the 180-day deadline set by the RBI in its controversial February 12 circular.

Edited excerpts:

We understand there are four power projects that you have decided to refer to National Company Law Tribunal (NCLT). Where do you think you can find buyers?

The lead banks have run a process of finding a buyer in the last few months. The kind of offers which have come is not fitting into the principles what we want to follow, like per megawatt. We have some benchmark, it should be above that and the buyer should be able to give at least 20 percent bank guarantee in the beginning to show the sincerity of his commitment.

So, wherever it is not fulfilling, maybe we would wait, but then August 27 is the date. So, we decided that before August 27, there is no possibility of resolution. So we will take it to NCLT and continue this process. Even after going to NCLT again, it is a resolution process.

How many projects are there where you have identified buyers already?

About four will go the NCLT out of this list, and there are few accounts which are already in NCLT.

Four accounts are going to NCLT, the rest where do you think you will find buyers for these power projects?

We discussed about 13-14 projects and so you can draw your conclusion. Definitely four are going to NCLT and others there is some possibility, some may happen before August 27. If everything goes right and for some, we may seek extension from the regulator.

First Published:Jul 30, 2018 8:48 PM IST