L&T Finance Receives Expressions of Interest for 10 Distressed Developer Loan Accounts

Mumbai

L&T Finance has received approximately ten expressions of interest (EoIs) for ten troubled developer loan accounts with a total outstanding balance of 3,022 crore. 

Kotak Mahindra-sponsored Phoenix ARC, Assets Care & Reconstruction Enterprise (ACRE), Asset Reconstruction Co (India) (Arcil), Omkara Assets Reconstruction, and Edelweiss Asset Reconstruction Co. are among the interested parties submitting EOIs. June 18 is the deadline for submitting firm proposals.

The loan collateral consists of ten real estate developers, including Supertech, Nirmal Lifestyle, and SU Toll Road, a special purpose vehicle owned by Anil Ambani's Reliance Infrastructure. Nirmal Lifestyle Developers has the largest loan available for sale with 790 crore, followed by Nirmal Lifestyle Malls with INR 251 crore and Supertech with INR 515 crore.

L&T Finance is adopting a 15:85 structure and is soliciting expressions of interest from asset reconstruction companies, with L&T Finance's utmost share in security receipts being 85%. By June 5, 2023, interested vendors were required to indicate their interest.

 A spokesperson for Edelweiss ARC and ACRE affirmed that they have submitted EOIs.

Nearly ten ARCs have submitted EOIs, but not all will submit formal proposals. L&T Finance has attempted to sell the Supertech loan for some time, but no bidders have shown interest.

This action is part of L&T Finance's ongoing efforts to reduce its wholesale portfolio, which includes both infrastructure and real estate finance. The company intends to concentrate more on consumer loans and abandon wholesale lending progressively.

Retail loans represented 75% of L&T Finance's total loan portfolio at the end of FY23, according to the company's statement released on April 28, 2023.