L&T Finance sells Rs 47.62 bn of distressed assets
ECONOMY & POLICY

L&T Finance sells Rs 47.62 bn of distressed assets

L&T Finance is set to offload its distressed-asset loan book worth Rs 47.62 billion to three asset reconstruction companies (ARCs) by the end of the current quarter, according to sources familiar with the matter. Phoenix ARC, backed by Kotak Mahindra Bank, is expected to acquire the majority of the 15 bid-out accounts, followed by CFM ARC and Prudent ARC.

L&T Finance, a subsidiary of L&T Finance Holding, had invited offers from ARCs for a portfolio valued at Rs 52.93 billion, comprising 16 accounts. The offering was structured with a combination of security receipts (SR) and cash payments, with 15 per cent paid upfront in cash and the remaining 85 per cent as security receipts. A reserve price of Rs20.80 billion was set.

However, none of the ARCs expressed interest in acquiring the exposure to Delhi-NCR realtor Supertech, one of the 16 accounts with outstanding loans of Rs 5.31 billion. Consequently, L&T Finance opted to sell 15 accounts with outstanding loans amounting to Rs 47.62 billion.

It is expected that the deal will be finalised before the end of the current month. L&T Finance's stock has seen a 40 per cent increase in 2023, reflecting the company's efforts to clean up its balance sheet by divesting troubled assets. Among the problematic exposures in L&T's portfolio are Avantha Holdings (Rs11.16 billion), Bhoruka Power (Rs18.76 billion), IREO (Rs 4.33 billion), and Supertech (Rs 5.31 billion).

The remaining accounts in the portfolio include Bhoruka Power Investments, Coast Town Planners, CSA Properties, Hanjer Biotech Mira, JCSA Enterprises, Mabsoot Buildhomes India, ND Telecom Services, Perpendicular Construction, RPS Infrastructure, Sagar Power Dendela, Shapoorji Pallonji Development Managers, and Smartstone Property Developers.

L&T Finance has been consistently offloading distressed asset portfolios to ARCs. In June of the current year, the finance company sold an Rs18 billion portfolio to Phoenix ARC, consisting of six real estate accounts, and in March, it divested an Rs 8.80 billion distressed portfolio containing five real estate loans to the Pune-based Xrbia group.
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L&T Finance is set to offload its distressed-asset loan book worth Rs 47.62 billion to three asset reconstruction companies (ARCs) by the end of the current quarter, according to sources familiar with the matter. Phoenix ARC, backed by Kotak Mahindra Bank, is expected to acquire the majority of the 15 bid-out accounts, followed by CFM ARC and Prudent ARC.L&T Finance, a subsidiary of L&T Finance Holding, had invited offers from ARCs for a portfolio valued at Rs 52.93 billion, comprising 16 accounts. The offering was structured with a combination of security receipts (SR) and cash payments, with 15 per cent paid upfront in cash and the remaining 85 per cent as security receipts. A reserve price of Rs20.80 billion was set.However, none of the ARCs expressed interest in acquiring the exposure to Delhi-NCR realtor Supertech, one of the 16 accounts with outstanding loans of Rs 5.31 billion. Consequently, L&T Finance opted to sell 15 accounts with outstanding loans amounting to Rs 47.62 billion.It is expected that the deal will be finalised before the end of the current month. L&T Finance's stock has seen a 40 per cent increase in 2023, reflecting the company's efforts to clean up its balance sheet by divesting troubled assets. Among the problematic exposures in L&T's portfolio are Avantha Holdings (Rs11.16 billion), Bhoruka Power (Rs18.76 billion), IREO (Rs 4.33 billion), and Supertech (Rs 5.31 billion).The remaining accounts in the portfolio include Bhoruka Power Investments, Coast Town Planners, CSA Properties, Hanjer Biotech Mira, JCSA Enterprises, Mabsoot Buildhomes India, ND Telecom Services, Perpendicular Construction, RPS Infrastructure, Sagar Power Dendela, Shapoorji Pallonji Development Managers, and Smartstone Property Developers.L&T Finance has been consistently offloading distressed asset portfolios to ARCs. In June of the current year, the finance company sold an Rs18 billion portfolio to Phoenix ARC, consisting of six real estate accounts, and in March, it divested an Rs 8.80 billion distressed portfolio containing five real estate loans to the Pune-based Xrbia group.

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