MUMBAI: The committee of creditors (CoC) for Aviom India Housing Finance has opted to use the Swiss challenge mechanism for conducting an auction, as per sources familiar with the matter. PwC has been engaged to define the parameters for the competitive bidding process, with the e-auction date expected to be confirmed soon.
“With the Swiss challenge mechanism selected, the CoC is set to invite competing bids, allowing any prospective investor to match or enhance the leading offer,” noted one source who wished to remain anonymous. “This transparent and competitive method is anticipated to maximize recovery for lenders. Once PwC establishes the challenge framework, the CoC will act swiftly to finalize timelines and open bidding for interested parties.”
The Swiss challenge mechanism enables the CoC to solicit competing bids against an initial offer to maximize value during insolvency resolution.
The administrator for Aviom India Housing Finance has not responded to an email inquiry.
Sources indicate that creditors have declined the revival proposal put forth by promoter Kajal Ilmi, who suggested settling dues of ₹1,385 crore over 26 months, including an upfront payment of ₹350 crore.
As reported by RealtyDailyNews on November 10, Unity Small Finance Bank is currently the leading contender to acquire Aviom India Housing Finance, having offered an upfront cash payment of ₹775 crore. Other bidders include Authum Investment & Infrastructure, Northern Arc, DMI Housing, KIFS Housing Finance, and Areion Group, owner of Omkara Asset Reconstruction Company.
India SME ARC has become Aviom’s largest lender after purchasing loans from seven institutions, with LIC Housing Finance listed among the major creditors.
Aviom’s difficulties began when auditors identified discrepancies in its financial statements, prompting an investigation by the National Housing Bank. The inquiry later revealed that the company had inflated mutual fund investments to overstate cash balances, as reported by RealtyDailyNews on November 26 and 28, 2024.
