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Global funds in revival talks with Altico lenders

Altico got into trouble last month after it failed to pay Rs 19.97 crore in interest payments.

, ET Bureau|
Updated: Oct 04, 2019, 08.55 AM IST
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Turnaround---BCCL
Lenders, including bankers and some NBFCs, are yet to reveal their cards in the proposed resolution plan, said those people.
Mumbai: Private equity funds SSG, Apollo Global, Oaktree Capital, Brookfield and others are negotiating with lenders to revive the mortgage lender Altico Capital after its key shareholders expressed their inability to invest more equity, three people familiar with the matter said.

These firms join others such as Cerberus who are also considering investments in the mortgage lender which defaulted on interest payments due to asset-liability mismatch and the regulator’s refusal to approve a change in end use of funds.

“Apollo Management is ahead and presented its plan to lenders on Monday and has proposed to invest $150 million in the equity of the company,” said one of the sources cited above who did not want to be identified.

Altico backed by Clearwater Capital, Abu Dhabi Investment Council, and Varde Partners, got into trouble last month after it failed to pay Rs 19.97 crore in interest payments on a loan obtained from the Dubai-based Mashreq Bank. Subsequently, the company hired Alvarez & Marsal to advise it on a resolution plan while its chief executive quit.

Altico snip 1

Clearwater, Abu Dhabi Investment Council and Varde have said they are not willing to invest more in the company.

An email sent to Altico remained unanswered till the time of going to press. Cerberus declined to comment. Brookfield, SSG and Oaktree did not respond to messages seeking comment.

“For any resolution plan to work, the company has to survive as a going concern in the first place,’’ said the second source cited above. “The company is being advised to conserve cash and dispose of assets quickly to remain liquid so that there is some value in the firm for future investors. Else the value could erode.’’ Altico Capital owes Rs 4,361.55 crore to banks and FIs.

Lenders, including bankers and some NBFCs, are yet to reveal their cards in the proposed resolution plan, said those people. The two meetings so far have centred around equity infusion, asset monetisation and value maximisation. The existing investors, who brought in about Rs 1,000 crore last fiscal, have offered to take a writedown on their equity, they said.
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