Assets Care and Reconstruction Enterprise (ACRE) Ltd, is an Asset Reconstruction Company, promoted by IFCI alongwith other banks and financial institutions. It is licensed by RBI under the SARFAESI Act with the objective of acquiring non-performing loans (NPLs) from Financial Institutions and banks in India. It started operations in July 2007.
The key objectives of ACRE are to unlock the value entrapped in the impaired and non-performing assets and to provide proactive management of the assets through financial restructuring, strategic partnerships, board oversight and provision of growth capital. It aims to incorporate international best practices for resolution of assets and set benchmarks in the Indian Financial Sector and to play a pioneering role in the Securitisation of distressed debt in India.
ACRE can either work collaboratively with the original Promoters to make the borrower financially viable through a comprehensive balance sheet restructuring and recapitalisation or, where that is not possible, it would arrange sale of the underlying assets for orderly liquidation of the secured debt. A restructured entity should be able to access normal commercial bank debt within a period of 12/24 months. Where this is not possible and underlying assets have to be sold, ACRE works collaboratively with co-lenders for aggregation and securitisation of the non performing loans. The NPAs go off the books of the lender and not only allow the banks to focus better on the new business opportunities, but an objective valuation through sale to third party has a positive impact on its share price.
ACRE also provides fee based Management Services to Banks / Financial Institutions for resolution of their NPLs that remain on their Balance sheet.