Hedge Funds Boost Bids as Indian Shadow Bank Sale Nears End
Tower cranes operate at an Indiabulls Real Estate Ltd. commercial building construction site in the Lower Parel area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Hedge Funds Boost Bids as Indian Shadow Bank Sale Nears End

(Bloomberg) -- Indian shadow bank Altico Capital India Ltd. is inching toward the final stage of a debt restructuring that’s been keenly watched as the country grapples with a crisis in the industry.

Rival hedge fund bidders Cerberus Capital and SSG Capital raised their bids for Altico late last week, people familiar with the matter said. The raised bids mean that creditors of the shadow lender could recover at least 71% of their outstanding debt of 38.7 billion rupees ($538 million), a marked improvement from earlier bids.

That’s a turnaround from just months ago, when three of the five initial bidders dropped out of the race for the lender. Loans of the shadow bank traded for almost half of face value, in the aftermath of its default in September.

The creditor-run debt restructuring at Altico is being closely followed as a barometer of India’s shadow banking crisis, as well as a potential opportunity for hedge funds and banks trading discounted debt. Distressed debt buyers including Deutsche Bank and Singapore-based hedge fund Broad Peak have made bets on the lender’s debt.

Creditors must now choose between the rival bids of SSG and Cerberus, as well as an Altico shareholder sponsored debt recast plan ahead of a two-stage vote mid-March.

Representatives for Altico, Cerberus and SSG declined to comment.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.