Clearwater-Backed Altico Says Yearlong Cash Woes Caused Default
Clearwater-Backed Altico Says Yearlong Cash Woes Caused Default
(Bloomberg) -- Beleaguered Altico Capital India Ltd. said a prolonged cash squeeze for India’s shadow lenders and property developers after the collapse of IL&FS Group last year led to its default.
Substantial strain in the short-term financing markets following a default by IL&FS caused a knock-on impact on other non-banking finance companies and the real-estate sector, Altico Capital said in a statement on Sunday. The financier is “facing challenges many similar businesses face in this environment,” it said.
Altico Capital, a non-banking finance company that focuses on lending to the real-estate sector, said earlier this month that it didn’t pay 199.7 million rupees ($2.8 million) of interest on borrowings from Dubai-based Mashreqbank PSC.
Altico’s default worsens liquidity woes for the country’s shadow lenders, prolonging a cash crunch for the stressed sector. The squeeze has led to a series of rating downgrades for property financiers, including Indiabulls Housing Finance Ltd. and Reliance Home Finance Ltd.
Mumbai-based Altico plans to ask lenders for time to map out a plan to repay debt, the company said. The company has just 2 billion rupees of cash on its books and has about 14 billion rupees of debt due by Oct. 12.
Clearwater Capital Partners, Varde Partners and Abu Dhabi Investment Council are the top investors in the company whose capital buffers stood at about 40%, or more than double the regulatory requirement, Altico’s investor presentation shows.
To contact the reporter on this story: Rahul Satija in Mumbai at rsatija1@bloomberg.net
To contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net, Stanley James
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