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Mumbai: Indiabulls Housing Finance Will cut ₹5,000 crore deal with global investor Oaktree Capital to receive a portion of the loan granted by non-banking finance company To bankroll multiple developers.
The debt capital will be infused through a jointly formed special purpose vehicle (SPV) which will issue debenture-like instruments to which Indiabulls and Oaktree will subscribe.
The SPV has already been set up and the funds are expected to be received in the next few weeks, said people familiar with the plan.
Oaktree Capital will infuse ₹3,000 crore into the combined entity, while Indiabulls Housing Finance 2,000 crore will be invested.
Oaktree Capital will hold 60% stake in this newly created entity, while the rest will be held by Indiabulls Housing Finance, said a person cited above. “The loans to be acquired, along with the underlying mortgaged assets, are not stressed loans and the underlying terms of the loans will remain unchanged,” he added.
The combined entity, through this transaction, will acquire these loans extended by Indiabulls Housing Finance to developers, thereby providing immediate exit and liquidity. NBFC,
These loans are expected to be repaid by the developers over time, depending on the completion of the project and the end of the sales cycle. The SPV will then repay the debentures on realization.
It is understood that Indiabulls Housing Finance may consider the deal with Oaktree as a model for future transactions. Another ₹2,700 crore deal is in the pipeline.
Over the years, some finance companies had entered into more complex deals with foreign investors by setting up alternative investment funds, where foreign investors had first claim on recoveries. The money deposited in the AIF was used to finance builders that were showing early signs of stress, while the developers who issued debentures to the AIF used the loan capital to repay the finance company.
Unlike the present deal, in such a transaction, the foreign investors hold the senior notes and are the first to receive the money distributed by the fund. However, such senior-junior deals have now stopped after some banks and realty funds drew the attention of the capital markets regulator.
Currently, Indiabulls Housing Finance has a loan book size of around ₹74,000 crore.
Earlier, in June 2020, Indiabulls Housing Finance raised over ₹2,000 crore from Oaktree Capital Group by pledging a part of its loans to realty developers.
As part of the deal in 2020, Oaktree Capital acquired non-convertible debentures sold by Indiabulls Housing Finance. The debentures were guaranteed by the underlying real estate portfolio of approximately ₹4,500 crore.
Oaktree Capital declined to comment, while ET’s email query on Indiabulls Housing Finance remained unanswered till press time on Sunday.
The Bombay Stock Exchange and the National Stock Exchange recently approved the reclassification of promoter Sameer Gahlaut and his trusts into the category of public shareholders. He resigned as non-executive director of the company in March 2022.
With 9.66% stake in Indiabulls Housing, Gehlot and his trusts had applied for reclassification to public shareholder category in April 2022.
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