How is the purchase consideration in a deal for acquisition of NPLs generally structured?
A. The purchase consideration for acquisition of NPLs may involve the selling lenders subscription to SRs where the seller is interested in staying invested or entirely cash consideration where the seller desires a clean exit. It can be even a combination of the two. The transaction structure for any acquisition deal is finalised after negotiation with the lenders. The banks / FIs desirous of selling their NPLs to ARCs should ensure that the sale is conducted in a prudent manner in accordance with a policy approved by their Board of Directors.
