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Mumbai: L&T Finance Initiates a bidding process to sell non-performing loans worth ₹3,022 crore asset reconstruction companies, These loans are spread across 10 accounts, which include Nirmal Lifestyle Developers, Nirmal Lifestyle MallAnd supertech,
is the largest loan for sale Nirmal Lifestyle Developers₹790-crore loan, followed by supertech at ₹515 crore and Nirmal Lifestyle Mall at ₹251 crore, said two sources aware of the development.
An L&T Finance spokesperson did not immediately respond to a request for comment.
Under the 15:85 structure, lenders are seeking expressions of interest from select individuals. asset reconstruction companies (ARC), where L&T Finance will hold a maximum of 85% in the Security Receipts (SRs).
Interested bidders have until Monday to indicate their interest.
The move by L&T Finance is part of efforts to reduce its wholesale finance book, which includes both infrastructure finance and real estate finance.
L&T Finance CEO Dinanath Dubhashi said, “We are doing bulk selling very fast.” “We do not know which assets we will sell, whether it is Phase-I or Phase-II, as we hardly have any Phase-III assets in bulk.”
The company has faced challenges in both the portfolios.
For real estate, L&T Finance had a specific structure in place to engage a private equity partner, but that arrangement has not received regulatory approval, the management informed investors during a recent call.
At Infrastructure Finance, the problem was that even though it had hired an investment banker and found a potential buyer, the latter faced difficulties in raising the required loan amount in the Indian market. The management said they wanted L&T Finance to guarantee the loan, defeating the purpose of selling the portfolio.
Consequently, L&T Finance has decided to sell the property at a fractional discount. The wholesale finance book has now come down to less than Rs 20,000 crore.
In March 2022, L&T Finance sold distressed loans worth ₹3,463 crore to Phoenix ARC, which Kotak Mahindra Bank, as reported by ET. The acquisition was done for ₹ 1,120 crore. In December 2022, L&T Finance and its subsidiary L&T Infra Credit sold distressed loans of ₹1,827.5 crore to Avenue Capital-backed Arcil for ₹1,092.5 crore, as reported. These transactions were also executed under a 15:85 structure, wherein 15% of the consideration was paid upfront and the rest in the form of SR.
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