INDIA BUSINESS WORLD - APRIL 1^st - APRIL 15^th - 2008

ASSETS CARE ENTERPRISE (ACE) GETS NOD FOR DEBENTURE ISSUE

The shareholders of Assets Care Enterprise (ACE) have approved the issuance of 3-year nonconvertible debentures aggregating Rs 40 crore to fund purchase of non performing loan (NPL) from banks and financial institutions. ACE, an asset reconstruction company jointly promoted by IFCI, PNB, LIC, TFCI and Bank of Baroda, had acquired a non performing loan outright for cash from Punjab National Bank in March 2008. The company has already paid 50% of the consideration amount due to PNB in cash. The balance 50% is now being paid in the form of debentures, a company statement said. According to ACE CEO Jayant Dang, “This move marks a very significant step for banks selling off their NPAs, as ARCs can now include debentures as an option for the purchase consideration. If successful, this would be the first time that a distressed debt has been funded from the capital markets in India”.