Acquisition of financial assets by Omkara ARC is governed by its Board approved Acquisition Policy. The Company mainly aims to acquire sub-standard / doubtful and loss assets, however, standard assets likely to face distress prospectively may also be considered for acquisition.
The Assets are acquired either on a cash basis or by issuing Security Receipts (SRs) or a combination of both. In case of cash purchase, assets are taken on the balance sheet of the Company, while in case of SRs, a trust is set up which holds the acquired assets. Omkara ARC acts as the trustee. The trust issues assets backed SRs to the investor which may be the selling Bank & FIs, Omkara ARC itself and/or any other Qualified Institutional Buyer.
The Company follows a structured and systematic approach towards acquisition of financials assets which includes but is not restricted to:
- Preliminary review of FAs proposed to be acquired in order to make EOI.
- Due Diligences such as Legal due diligence, valuations of FAs.
- Execution of required legal documents to complete the transaction.
- Issue of security receipts.
Omkara ARC also performs the role of a bridge between potentially viable sick assets & the investors looking for avenues of investment in distressed assets