Altico Capital looks to raise ₹2,000 crore1 min read . Updated: 09 Oct 2019, 11:03 PM IST
- Fundraise via asset sale part of lender’s resolution plan
- Resolution plan is expected to be submitted to Altico’s lenders, investors by the end of next week
MUMBAI : Altico Capital India Ltd, the real estate-focused lender that defaulted on interest payments in September, has proposed to sell loans worth around ₹2,000 crore as part of its debt resolution plan, two people directly aware of the development said.
The resolution plan is expected to be submitted to Altico’s lenders and investors by the end of next week, the people cited above said on condition of anonymity.
The Mumbai-based real estate lender has already identified the assets that it plans to sell as part of its resolution plan and it will offer the proceeds from such a sale, upfront to its lenders, said the first person mentioned above.
“The immediate plan right now is to monetize these assets. We already have a strong interest for these properties mainly from lenders who are in a similar business," the first person said.
“Altico currently has a collateral cover of close to ₹11,000 crore against its present loan book size of around ₹7,000 crore."
Located across seven cities, including Mumbai, Chennai and Bengaluru, these assets are land parcels, commercial and residential projects at different stages of constructions. The company’s portfolio of real estate investment spread across 30% commercial office, 60% residential and the remaining in logistics and warehousing.
At present, Altico’s total outstanding debt stands at ₹4,361.5 crore, from 27 lenders including Yes Bank, State Bank of India and HDFC Bank, among others.
“While there is a problem with financing in real estate, there is a lot of interest in equity because equity has no pressure of being non-performing assets," the person cited above said. The first draft of the resolution plan would be presented to the lenders by next week and the company expects to execute the plan, once approved, within 90 days, he added.
Altico’s troubles started when it missed an interest payment to Dubai-based Mashreq Bank on 12 September. Following the default, rating agency CARE Ratings downgraded Altico Capital. For its resolution, Altico is working alongside turnaround advisory firm Alvarez and Marsal and legal advisory firm Shardul Amarchand Mangaldas & Co. It also sought a moratorium on further repayments from its lenders.