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Private Equity Firm Apollo Global Shows Initial Interest In Altico Capital

Apollo Global begins preliminary talks with lenders to invest in Altico Capital.



A man walks past reinforcing steel and concrete columns at the construction site of a wholesale market developed by Vishvaraj Infrastructure Ltd. in Nagpur, India. (Photographer: Dhiraj Singh/Bloomberg)
A man walks past reinforcing steel and concrete columns at the construction site of a wholesale market developed by Vishvaraj Infrastructure Ltd. in Nagpur, India. (Photographer: Dhiraj Singh/Bloomberg)

U.S.-based alternative investment fund, Apollo Global Management has shown initial interest to buy stake in Altico Capital India Pvt. Ltd., according to two people in the know. The people, who requested anonymity as the discussions are confidential, said that the fund has made presentations to lenders last week, however, the discussions are still in preliminary stages.

Real estate financier Altico Capital fell into financial stress after it defaulted on repayments to Mashreq Bank, on external commercial borrowings. The company’s board had appointed Alvarez & Marsal to help them come up with a resolution plan and turn the company around.

Lenders led by State Bank of India have an exposure of over Rs 4,300 crore to Altico Capital. Mutual funds are also part of the lending consortium and have a sizeable exposure. The lending consortium is also open to talking with other funds to seek better offers, the people quoted earlier said.

Lenders to Altico Capital are also in talks with EY to advise them on the resolution process.

SBI, Altico Capital, Apollo Global Management and EY are yet to respond to queries sent on Thursday. The story will be updated with their responses, when received.

On Sept. 20, BloombergQuint had first reported that the real estate lender has sought more funds from its lenders as part of a resolution plan. The plan included monetisation of assets, restructuring its loan book and equity infusion from existing as well as newer investors. The non-banking finance company is backed by global private equity firms Clearwater Capital Partners, Abu Dhabi Investment Council and Varde Partners and has been under pressure due its exposure to the real estate sector.

Altico Capital started facing considerable stress after some of its top borrowers began defaulting on their loans. About 61 percent of the company’s overall loan book is to the top 10 borrowers, BloombergQuint had reported. Lenders to the company have already signed an inter-creditor agreement and have begun the resolution process for the company.

In the days leading up to the Mashreq Bank default, Altico Capital said it received loan recall notices from its lenders worth around Rs 1,056 crore between Aug. 30 and Sept. 9.

In 2019-20 so far, the company has repaid Rs 1,658 crore to its lenders and raised fresh borrowings worth Rs 447 crore. It also received Rs 400 crore from pre-payments and refinancing of its borrowers.