Podcast: DHFL dangles equity conversion before lenders; Altico gets PE attention
Photo Credit: Reuters

Two non-banking financial companies -- Dewan Housing Finance Corporation Ltd (DHFL) and Altico Capital – are busy working out resolution plans for bankruptcy with lenders as India's financial sector woes continue.  

DHFL, which is the fourth-biggest housing finance company, has proposed to the lenders a plan to convert debt to equity as part of which the latter will acquire a 51% stake.

Meanwhile, Altico Capital has attracted interest from private equity (PE) firms including Apollo Global Management, SSG, Oaktree Capital and Brookfield, a person aware of the development told VCCircle.

A week ago, Altico’s three shareholders—private equity firms Varde Partners, Clearwater Capital Partners and Abu Dhabi Investment Council—had initiated negotiations with lenders for a debt restructuring plan. While no fresh equity would be infused, lenders are willing to hear other suitors such as KKR and Blackstone, the person said.

A week ago, another big builder got admitted to the insolvency resolution process: Lokhandwala Infrastructure Pvt. Ltd.

In the banking sector, Yes Bank is undergoing a crisis of confidence due to its large exposure to troubled firms and reduction of stake by its promoter. The bank's shares have slid to below Rs 50 apiece from over Rs 300 a year ago.

Also, the Punjab & Maharashtra Co-operative (PMC) Bank crisis worsened due to its exposure to Housing Development Infrastructure Limited, which is facing insolvency, and now its promoters have been arrested.

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