Hong Kong-based stressed asset specialist Ares SSG has marked its single-largest investment in India by completing the acquisition of Altico Capital India.
This is also the first resolution of a non-banking financial company (NBFC) outside the bankruptcy law.
Ares SSG has acquired Altico for about Rs 2,800 crore ($380 million), in line with its original resolution plan submitted in February 2020.
Ares SSG, the brand name for SSG Capital Holdings after New York-listed Ares Management Corp acquired a controlling stake in the firm early last year, had offered Rs 2,754 crore and promised Rs 354 crore in the form of security receipts, as per the plan.
The NBFC owes a total of Rs 4,300 crore to 27 lenders led by State Bank of India (SBI).
In early 2020, the stressed asset specialist had emerged as the winning bidder to acquire a controlling stake in the cash-starved real estate lending firm.
Altico’s earlier shareholders were private equity firms Clearwater Capital Partners and Varde Partners, and Abu Dhabi Investment Council, a state-owned fund of the Gulf emirate.
Manish Jain, chief executive of SSG Advisors LLP, an adviser to Ares SSG, said, “Ares SSG’s plan for Altico allows its creditors to realise immediate value for the assets.”
The NBFC used to provide loans and financing to India’s real estate sector before experiencing financial difficulties in 2019.
Ares SSG, set up in 2009 by former members of Lehman Brothers’ Asia special situations group, has in the past backed developers Emaar MGF, Lotus Greens and Lodha Developers, and mortgage lender PNB Housing Finance Ltd in India.
With a pan-Asian presence, Ares SSG is one of the largest alternative asset managers in the Asia-Pacific with about $7 billion in assets under management, more than 80 employees and over 120 direct institutional investors as of December 31, 2020.
Ares SSG also has exposure to real estate through another NBFC—Shapoorji Pallonji Finance Pvt. Ltd–in which it had picked up a 46.87% stake in 2018.