L&T Finance has initiated a bidding process to sell non-performing loans worth Rs 3,022 crore to asset reconstruction firms, a report by the Economic Times (ET) said. Nirmal Lifestyle Developers, Nirmal Lifestyle Malls, and Supertech are just a few of the ten accounts that these loans are split among.
Nirmal Lifestyle Developers' Rs 790 crore debt is the largest loan up for sale, followed by Supertech's Rs 515 crore debt and Nirmal Lifestyle Malls' Rs 251 crore debt, sources told ET.
Under the 15:85 structure, the lender is seeking expressions of interest from select asset reconstruction companies (ARCs), with L&T Finance's maximum stake in security receipts (SRs) set at 85 per cent. Bidders interested in participating have till Monday to express their interest.
L&T Finance is making this step as part of its efforts to reduce its wholesale finance book, which comprises both infrastructure and real estate finances.
"We are rapidly selling wholesale," said Dinanath Dubhashi, CEO of L&T Finance, adding, "We don't know which asset we will sell, whether it will be a stage-1 or stage-2, as we hardly have any stage-3 assets in wholesale."
The corporation has had difficulties in both portfolios.
L&T Finance had a specific structure in mind for real estate that involved a private equity partner, but that arrangement did not get regulatory approval, management informed investors on a recent call.
The issue with infrastructure finance was that, despite hiring an investment banker and finding a possible buyer, the latter was having difficulty raising the required debt amount in the Indian market. They wanted L&T Finance to guarantee the loan, which management claimed negated the objective of selling the portfolio.
As a result, L&T Finance has opted to sell assets individually at a discount. The wholesale finance book has now reduced to less than Rs 20,000 crore.