The transaction is structured using the RBI’s securitization guidelines and involves securitization of wholesale real estate project finance loans with security over a near-complete residential project in Mumbai, the lender said in a statement.
The sale of the loan portfolio to Oaktree comes at a time when DHFL witnessed its loan disbursements drop by a massive 95% sequentially to just ₹510 crore in the December quarter, following the liquidity crisis that plagued the Indian NBFC sector after defaults by Infrastructure Leasing & Financial Services (IL&FS).
“We recently committed to expeditiously bring down our project finance exposure. Within less than two months of making the above commitment, company has consummated the above transaction that reduces its project finance book by about 8%. We will continue to focus on growing our retail lending franchise,” said Kapil Wadhawan, chairman and managing director at DHFL.
DHFL intends to further reduce its real estate project finance exposure through more such transactions in the future, the company said. Certus Capital acted as the financial adviser on the transaction.
“This first of its kind transaction in India is representative of how we methodically apply our multi-asset class, structuring, underwriting, investing and restructuring expertise to partner with Asian financial institutions to help them meet their objectives. Our large scale, long-term flexible capital, regional presence and global experience enable us to quickly deliver solutions that most other institutions simply cannot,” said Pedro Urquidi of Oaktree.
This article was first published on livemint.com