Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
Global investment firm Avenue Capital-backed Asset Reconstruction Company of India (Arcil) has reportedly emerged as the highest bidder for L&T Finance's real estate portfolio of Xrbia group, a Pune-based real estate developer. According to two sources familiar with the matter, Arcil has offered INR 700 crore in a combination of cash and security receipts for a portfolio worth INR 880 crore, which translates into a recovery rate of 80% for the finance company. The company was also in talks with Aditya Birla ARC and Phoenix ARC to sell the same portfolio.
Last February, L&T Finance had invited offers from ARCs for the sale of five Xrbia Group companies, which included Xrbia Developers, Xrbia Chakan Developers, Xrbia Warai Developers, Xrbia Ambience Realty LLP, and Eiffel Lifespaces.
In a separate development, Phoenix ARC is set to acquire two pools of non-performing assets (NPA) from Bandhan Bank after the bank received no counteroffer at a Swiss challenge auction held last week. Phoenix ARC has offered INR 369 crore for an NPA pool worth INR 2,614 crore and INR 370 crore for a pool of INR 2,316 crore. The offer, a combination of cash and SR, will equate to a 15% recovery.
L&T Finance and Bandhan Bank have been selling distressed loans to clean their books. During the December quarter, L&T Finance and its subsidiary sold a distressed loan pool worth INR 1,827.5 crore to Arcil for INR 1,092.5 crore under the 15:85 structure. Bandhan sold a distressed portfolio of INR 8,897 crore to Phoenix for INR 801 crore in a combination of cash and SRs.
Asset Reconstruction Company (ARC) is a specialized financial institution that buys the distressed assets of banks and financial institutions at a discount and tries to recover them. The security receipts (SRs) are instruments issued by an ARC to the bank or financial institution that sells its bad loans. The SRs represent a share in the income generated from the recovery of these assets. Swiss challenge auction is a type of bidding process that is used to sell public assets where the original bidder is given a chance to match or better the offer made by a competing bidder.
Avenue Capital is a global alternative investment management firm founded in 1995 that invests across a range of credit strategies, including distressed debt, special situations, and private lending. L&T Finance is a leading Indian non-banking financial company that offers a wide range of financial products and services across retail, corporate, and infrastructure finance sectors. Phoenix ARC is a leading asset reconstruction company in India that focuses on acquiring and resolving distressed assets. Bandhan Bank is an Indian banking and financial services company headquartered in Kolkata.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
