Union Bank of India fails to get bidders for its bad loans

Union Bank of India did not receive any bid for non-performing loans put on sale, including those to Visa Steel and Horizon Hotel, because the floor prices it set were higher than recent trades in these loans, people aware of the development said.

Union Bank managed to sell the loan in its second attempt last month at {828 crore to ASREC (India) ARC, which was a 40% recovery on the loan.

Union Bank had put on sale a {410-core loan of bankrupt Visa Steel and set the reserve price at {164.28 crore, entailing a recovery of at least 40%. For the {212-crore debt to Hotel Horizon, the reserve price was set at {165 crore, seeking at least 77% recovery.

The "offer price was higher than the last trades and so it did not receive any bids in the auction held last week," a bank official said on condition of anonymity.