The transaction, subject to statutory and regulatory approvals and fulfillment of other conditions, is expected to complete before 31 December
As of 31 March, Religare Finvest reported total sales of ₹795.66 crore, contributing about 33% of REL’s consolidated revenues
MUMBAI :
Religare Enterprises Ltd (REL), which was stung by controversies surrounding its erstwhile promoters, Singh brothers Malvinder and Shivinder, on Wednesday said that it has agreed to sell its 85.63% stake in its lending arm Religare Finvest Ltd for ₹330 crore to Chatterjee group’s TCG Advisory Services.
The funds raised from the stake sale will be used to repay the outstanding loans to group companies, third parties and for other general corporate purposes. The firm also said it had settled a dispute with Axis Bank, which was restraining the capital raise plans in its various group companies.
“The divestment of our NBFC business will help conserve capital for the company and allow us to focus on other businesses of the group. It’s a win-win deal for REL and TCG, who can help grow the NBFC business with a long term capital commitment," said Nitin Agarwal, Group CFO, Religare Enterprises and CEO, Religare Broking Ltd.
As of 31 March, Religare Finvest reported total sales of ₹795.66 crore, contributing about 33% of REL’s consolidated revenues, while the housing finance arm formed 5.41% of its consolidated sales.
“With TCG coming in as a promoter shareholder, we have strong backing of capital and long-term commitment towards business. Our lenders are also positive to complete the restructuring of debt to ensure sustainable growth of company and their interest," said Sanjay Palve, managing director and chief executive officer of Religare Finvest and Religare Housing Developement Finance Company Ltd, its housing finance subsidiary.
The transaction, subject to statutory and regulatory approvals and fulfillment of other conditions, is expected to complete before 31 December. While a binding term sheet was signed on 10 July, both parties signed the share purchase agreement on 1 October, the company said.
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