BackAres SSG Capital completes Altico Capital acquisition
The deal is the first resolution of a defaulting NBFC outside India’s Insolvency and Bankruptcy Code
PremiumMUMBAI: Hong Kong-based stressed asset specialist Ares SSG Capital has completed the acquisition of realty financier Altico Capital India Ltd, the company said on Thursday.
The acquisition marks Ares SSG Capital’s single largest investment in India. The deal is also the first resolution of a defaulting non-banking financial company (NBFC) outside India’s Insolvency and Bankruptcy Code.
Funds managed by Ares SSG, in partnership with asset reconstruction firm Assets Care and Reconstruction Enterprise Ltd (ACRE), acquired all outstanding loans and investments of Altico for ₹2,800 crores ($380 million), in line with the original resolution plan submitted in February 2020.
“Our acquisition of Altico reflects Ares SSG’s strong commitment to supporting widespread efforts by policymakers, investors and industry to alleviate the impact of non-performing assets in India’s banking and financial services sector. This investment also highlights our confidence in the prospects of India and the steps being taken to spur growth, which has over the past year, been held back by the global pandemic," said Shyam Maheshwari, partner, Ares SSG. On 23 February, Altico’s board had approved the implementation of the resolution plan.
Altico, which was backed by private equity firms Clearwater Capital Partners, Abu Dhabi Investment Council and Varde Partners, will now surrender its certificate of registration as an NBFC before the Reserve Bank of India (RBI). In September 2019, it had defaulted on interest payment to Dubai-based Mashreqbank PSC amid tight liquidity in India’s credit market, resulting in a few lenders recalling loans and, subsequently forming a committee to execute a resolution plan under RBI’s 7 June circular. Altico Capital owed over ₹4,300 crore to 27 lenders, such as State Bank of India, Bank of Baroda, UTI MF and Reliance MF.
Ares SSG is one of the largest alternative asset managers in the Asia-Pacific with around $7 billion in assets under management (AUM). Formerly SSG Capital Holdings, the stressed asset manager was rechristened as Ares SSG, after New York-listed Ares Management Corp., picked up a controlling stake in early 2020.
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