Billionaire Ajay Piramal’s shadow banking unit has borrowed 1,100 crore ($153 million) from Barclays Plc to refinance part of its existing debt and extend new loans, according to people familiar with the development.

While the rate of interest is 7.5% on the four-month loan deal signed last week between Piramal Capital & Housing Finance Ltd and the British bank, the blended annualized cost, including the fee, is higher than 10%, the people said, asking not to be named as the information is not public. The Indian non-bank financier has offered to repay the borrowings from the money raised from a proposed share sale, and the security cover is two times the loan value, the people said.

The funding for Piramal Capital comes at a time many Indian financiers are reeling from a 17-month sustained upheaval in the nation’s credit markets, which has hurt cash flow and curtailed their ability to repay loans. Piramal Capital was downgraded to AA from AA+ by Icra Ltd and CARE Ratings Ltd in June and July, citing funding challenges faced by the country’s shadow lenders.

A Mumbai-based representative for Piramal and Hong Kong-based spokeswoman for Barclays declined to comment on the deal. Barclays has solely underwritten the loan and will hold it on its books until repayment, one of the people said.

Piramal Enterprises Ltd, the flagship of the group with businesses ranging from lending to drug manufacturing, is in the process of a $770 million rights offering to bolster its balance sheet. In November, the company proposed repaying 1,500 crore of debt to Standard Chartered Plc. early after getting a waiver on a covenant, people with knowledge of the matter had said.

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