Warburg Pincus To Acquire 80% Stake In Avanse Financial Services

Warburg Pincus Group will acquire nearly 80 percent stake in Avanse Financial Services Ltd. from Dewan Housing Finance Corporation Ltd. and Wadhawan Global Capital.

Wadhawan Global Capital said it has entered a definitive agreement with an affiliate of the global private equity major to sell its entire 49.04 percent stake in the education finance subsidiary, Avanse Financial Services.

Separately, DHFL also said the company will sell its entire stake of 30.63 percent in Avanse Financial Services to an affiliate of the Warburg Pincus Group.

Both the companies, however, did not disclose the financial details of the transaction.

Avanse Financial Services is an education focused non-bank financial company. It is an associate enterprise of the diversified financial services group Wadhawan Global Capital and DHFL.

Avanse is also backed by the International Finance Corporation, which has 20 percent equity stake in the company.

Commenting on the development, Wadhawan Global Capital Chairman Kapil Wadhawan said, "The transaction with Warburg Pincus will allow the company to further strengthen its position in the education financing industry. This sale also unlocks the latent value within the Wadhawan Global Capital Group while reinstating our immediate and long-term focus on our core business."

EY and Prime Research & Advisory Ltd. were the financial advisers to the company and the sellers on the transaction. Shardul Amarchand Mangaldas & Co. acted as the legal advisers to the sellers and company on this transaction.

DHFL further said it has entered into a share purchase agreement with the Warburg Pincus Group, Avanse and the other sellers, including Wadhawan Global Capital.

The proposed transaction is subject to applicable regulatory and other approvals and certain other conditions.

In a separate filing, DHFL said it is undertaking corporate re-organisation within the company and announced resignation of its company secretary and compliance officer.

"Santosh Sharma (currently the CFO) will assume a new role as the head-corporate strategy with effect from March 16, 2019. The finance and accounts functions, which were supervised by the chief financial officer, shall now be supervised by vice president-finance and vice president-accounts of the company, respectively," the company said.

DHFL's Company Secretary and Compliance Officer Niti Arya has resigned from the company with effect from March 15, 2019.

Meanwhile, DHFL's independent director VK Chopra had also resigned.

DHFL is under the scanner of various authorities following allegations of siphoning off Rs 31,000 crore out of total bank loans of Rs 97,000 crore through layers of shell companies.