A customer withdraws a stack of Indian twenty rupee banknotes (Photographer: Dhiraj Singh/Bloomberg)

Blackstone Buys Wadhawan Unit as India Firm Looks to Cut Debt

(Bloomberg) -- Wadhawan Global Capital, parent of an Indian mortgage lender hit by allegations of financial irregularities, sold its stake in another unit to funds managed by Blackstone LP.

Wadhawan Global sold its 70 percent holding in Aadhar Housing Finance Ltd., it said in a statement on Saturday. Its unit Dewan Housing Finance Corp. also sold its 9.2 percent Aadhar stake as part of the same transaction. Terms weren’t disclosed.

“The transaction with Blackstone is a part of our multi-pronged strategy to reduce the corporate debt levels and strengthen our balance sheet,” Chairman Kapil Wadhawan said in the statement.

Blackstone Buys Wadhawan Unit as India Firm Looks to Cut Debt

Dewan Housing’s shares lost almost half their value this week after Indian website Cobrapost on Tuesday alleged that Dewan had diverted funds to shell companies. Dewan said the loan disbursements were in line with regulations and “fully scrutinized.” Indian financial markets are also on edge after recent defaults by Jet Airways Ltd. and Infrastructure Leasing & Financial Services Ltd.

Blackstone bought the Aadhar stake for about 27 billion rupees ($379 million), the Economic Times reported on Saturday, citing a source it didn’t identify. International Finance Corp., the investment arm of the World Bank, holds about 17 percent of Aadhar, according to the report.

Kapil Wadhawan has said his group is in the process of selling non-core assets and is committed to ensure sufficient liquidity to meet commitments in the next 12 months.

Dewan Housing tumbled about 47 percent in the past five trading sessions to 111.2 rupees, its lowest since May 2014.

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