India: Apollo Global to invest up to $150m in troubled real estate lender Altico

Private equity (PE) firm Apollo Global Management has offered to invest up to $150 million in troubled real estate lender Altico Capital India Ltd, said two people aware of the development, requesting anonymity.

As part of the initial talks with Altico’s lenders, Apollo Global expressed its interest to pick up a stake in the company, which could be worth $100-150 million. Part of this investment will be used for interest payments, while the rest will be used to grow the company’s books, said the first person cited above.

According to the person, Apollo wants the lenders to provide Altico with fresh debt financing of $200-250 million to help it grow its loan book.

“Apollo Global has approached the lenders (of Altico) directly with a proposal to take over Altico. These are initial discussions and the contours of the transaction might change going ahead as the investor conducts its due diligence,” he said, adding that the Apollo Global met with the lenders on Monday to make its presentation.

Mint reported on 30 September that Altico Capital, which defaulted on interest payments, is in talks with private equity funds, including Apollo Global Management and Cerberus Capital, for a stake sale to raise funds.

When contacted, Apollo Global declined to comment. “While we do not comment on market speculation, we reiterate that Altico and its shareholders remain deeply committed to the Indian market,” said an Altico spokesperson.

At present, Altico’s total outstanding debt from 27 lenders stands at 4,361.55 crore. Altico Capital owes the most to IFCI ( 463 crore), Yes Bank ( 400 crore), State Bank of India ( 363 crore), UTI Mutual Fund ( 359 crore) and HDFC Bank ( 280 crore).

On 20 September, Mint reported that Altico had told its lenders that as part of a resolution plan, it is in talks to sell some assets and infuse fresh funds from new shareholders. For this, Altico said it was working alongside turnaround advisory firm Alvarez and Marsal, and legal advisory firm Shardul Amarchand Mangaldas and Co. It also sought a moratorium on further repayments from its lenders.

Altico is one of the many shadow banks affected by the souring market sentiment, following defaults by Infrastructure Leasing and Financial Services Ltd (IL&FS) last year.

“A significant strain in short-term financing markets precipitated by the September 2018 default by IL&FS created a knock-on impact on other NBFCs and the real estate sector in general,” Altico Capital said in a statement earlier this month.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.