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Altico lenders ask private equity funds to infuse capital

Shubhra Tandon,Shritama Bose
Altico, Altico lender, private equity fund, equity fund, infuse capital, NBFC, industry news, NBFC, ADIC, UTI Mutual Fund

Lenders to crisis-ridden Altico Capital India are understood to have asked private equity (PE) funds to infuse more equity capital into the non-banking financial company (NBFC). Representatives of Clearwater Capital Partners, Varde Partners and Abu Dhabi Investment Council (ADIC), shareholders in Altico, are understood to have asked lenders to take a haircut at a meeting on Monday. An executive with a large public sector bank told FE, the case will be resolved under the June 7 circular, with the ICA being signed in due course.

Emails sent to ADIC remained unanswered till the time of going to press, while Varde declined to comment. Altico is understood to have appointed Alvarez & Marsal as process advisor a few days ago.

Sources with knowledge of the developments said the liquidity situation at Altico was exacerbated by total loan recalls of Rs 1,056 crore received prior to the date of default. The NBFC was due to repay Rs 488 crore and was also facing payment obligations of about Rs 806 crore in September due to acceleration of facilities. Over and above this, the company is also believed to have received recall notices to the tune of Rs 563 crore post the default.

Altico Capital defaulted on an under-Rs 20-crore scheduled interest payment on an ECB loan from Masherq Bank of the UAE on September 12. The NBFC’s total borrowing from banks and financial institutions stood at Rs 4,361.55 crore as of September 12. Meanwhile, data from Value Research show that debt schemes of mutual funds have an exposure of Rs 537.67 crore to Altico Capital India as in August 2019.

UTI Mutual Fund has an investment of Rs 333.84 crore in Altico across seven debt schemes, while Reliance Mutual Fund has an investment of Rs 203.83 crore, showed data from Value Research. Both the companies have decided to create a segregated portfolio in their respective funds.

According to Emkay Global Financial Services, Altico's loan book of Rs 6,900 crore, as of June 2019, has exposure to real estate developers, where in terms of life cycle, 31% of the loan book was attributable to early-stage funding of projects and about 70% of the loan book was under moratorium.

Along with two other entities including KKR, Altico has a combined exposure of Rs 900-1,000 crore to SARE Homes, promoted by London-based Duet Group, which was facing severe cash crunch due to unsold inventory.

Altico also had an initial exposure of Rs 430 crore to Supertech in the NCR. It recently infused Rs 100 crore into Pharande Group, a struggling developer based in Pune.