Clearwater-Backed Altico to Seek More Time to Repay $610 Million
Clearwater-Backed Altico to Seek More Time to Repay $610 Million
(Bloomberg) -- Beleaguered Altico Capital India Ltd. will seek more time to repay its debt after an unexpected default at the financier last week caused several creditors to call back their loans, a person with knowledge of the matter said.
The company, which has just 2 billion rupees ($28 million) of cash on its books, and has about 14 billion rupees of debt due by Oct. 12 plans to ask lenders for more time to repay its obligations when it meets creditors on Thursday, the person said, asking not to be identified as the discussions are private. The company will also offer to sell some of its assets and discuss initial proposals from some equity investors, the person said.
The real estate lender that failed to repay 199.7 million rupees of interest on borrowings from Dubai-based Mashreqbank PSC is the latest casualty in India’s stressed shadow banking industry that has been seeing a string of defaults over the last 15 months. Altico with a total outstanding debt of about 44 billion rupees will halt all repayments until a resolution is reached, the person said.
India’s non-banks have been mired in a yearlong cash crunch that’s deepening as banks laden with bad loans shy away from funding the industry. The crisis has led to a series of rating downgrades of top shadow lenders recently, including Indiabulls Housing Finance Ltd. and Reliance Commercial Finance Ltd.
Altico’s marquee investors, which include Clearwater Capital Partners, Varde Partners and Abu Dhabi Investment Council are working with the financier to resolve the cash crunch, the person said. Banks had started recalling their loans after Altico defaulted on Sept. 12 prompting downgrades by rating companies. Gross bad loan ratio at the Mumbai-based financier’s 69 billion rupee loan book stood at 1.7% as of September, the person said.
| To 10 Creditors | Debt instrument | Outstanding debt in INR billion |
|---|---|---|
| Mashreq Bank | Term loan | 6.60 |
| IFC | NCD | 4.63 |
| Yes Bank | Term loan | 4.00 |
| SBI | Term loan | 3.63 |
| UTI MF | NCD | 3.59 |
| HDFC Bank | Term loan/WCDL*/OD* | 2.80 |
| Bank of Baroda | Term loan/OD | 2.78 |
| BAC | NCD | 2.50 |
| Reliance MF | NCD | 2.23 |
| L&T Finance | Term loan | 1.81 |
| Total | 34.57 |
NOTE: Principal amount outstanding as of Sept. 12; *WCDL implies working capital demand loan, and OD implies overdraft facility
Source: Company presentation
The sudden exits of Altico’s Chief Executive Officer Sanjay Grewal on Tuesday and Chairman Naina Lal Kidwai, a former HSBC India chief earlier this month has left Chief Operating Officer Sanjeev Agrawal in charge of the lender, another person familiar with the matter said.
--With assistance from Anurag Joshi, Dhwani Pandya and Russell Ward.
To contact the reporters on this story: Rahul Satija in Mumbai at rsatija1@bloomberg.net;Suvashree Ghosh in Mumbai at sghosh186@bloomberg.net;Divya Patil in Mumbai at dpatil7@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Anto Antony, Arijit Ghosh
©2019 Bloomberg L.P.