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Kotak Mahindra-backed Phoenix ARC, Cerberus Capital, and Ares SSG with ACRE are actively contending for the prized distressed loan portfolio of Piramal Group, valued at a substantial Rs 2.6 billion. Esteemed for its stature, this transaction stands out as one of the largest deals involving distressed assets, particularly owing to the inclusion of debts from illustrious real estate endeavours.
At the core of this debt pool lies the prominent Advantage Raheja account, an integral component of the esteemed Deepak Raheja group, encompassing prestigious properties such as the JW Marriott in Bangalore and Crowne Plaza. These premier projects alone account for a significant portion of the debt that has been put up for sale. Additionally, loans stemming from Paranjape Schemes Construction, Bhoruka Renewable Energy Company, Mont Vert, a prominent developer based in Pune, and Ozone Developers are also part of this captivating portfolio.
Piramal Group will engage in negotiations with the highest bidder, meticulously establishing a reserve price for the forthcoming auction. It is noteworthy that these loans originate from the well-regarded Piramal Capital Housing, distinct from the recently acquired Dewan Housing Finance portfolio.
Piramal Group, a multinational conglomerate, boasts a wide range of business ventures in pharmaceuticals, financial services, life sciences, drug discovery, alternative investments, and real estate. With a global presence in over 100 markets and a workforce of 10,000 employees from 21 nationalities, the group is driven by four core values: innovation, entrepreneurship, integrity, and trusteeship. These values guide their creative approach, decisive actions, ethical conduct, and commitment to the interests of customers, employees, partners, and shareholders.
Distressed debt trading revolves around acquiring debt obligations, such as high-yield bonds, that are trading at distressed levels, with the aim of later selling them at a higher value for a profitable trade. Distress can arise from factors like business failure, income loss, or an inability to comprehend loan terms. Distressed borrowers often employ strategies like forbearance, reinstatement, and loan modifications to prevent loan default. A company's securities are labelled as distressed when it struggles to fulfil a significant portion of its financial obligations. Unlike junk bonds with a BBB or lower credit rating, distressed securities carry a credit rating of CCC or below.
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