Indiabulls Deal with Oaktree to Acquire Chunk of its Loans
Indiabulls Housing Finance will cut a Rs 5000 Crs deal with global investors Oaktree Capital to acquire a chunk of loans given by the non -banking finance company to bankroll several developers. The infusion of debt capital will happen through a jointly formed special purpose vehicle (SPV) which would float instruments like debentures that Indiabulls and Oaktree would subscribe to. The SPV has already been set up and the fund infusion is expected over the next few weeks. Oaktree Capital will be infusing Rs 3000 crore in this joint entity while Indiabulls Housing Finance will invest Rs 2,000 Crs. Oaktree Capital will hold a 60% stake in this newly created entity, while the balance will e Indiabulls Housing Finance in line with their capital commitment. Loans that would be acquired along with underlying mortgaged properties are not stressed loans and the underlying terms of the loans would remain unchanged. The joint entity through this transaction, will acquire these loans extended to developers by Indiabulls Housing Finance thereby providing an immediate exit and liquidity to the NBFC. These loans are expected to be repaid by the developers over time, based on the completion of the project and at the end of the sales cycle. The SPV will then repay the debentures as and when the recovery takes place. Indiabulls Housing Finance may consider the deal with Oaktree as a model for future transactions. Another Rs 2,700 Crs deal is in the pipeline. Currently Indiabulls Housing Finance’s loan book size is around Rs 74, 000 Crs. Prior to this in June 2020, Indiabulls Housing Finance had raised over Rs 2,000 Crs from Oaktree Capital Group by pledging a part of its loan extended to realty developers. Under the deal in 2020 Oaktree Capital acquired non-convertible debentures sold by Indiabulls Housing Finance. The debentures were guaranteed by an underlying real estate portfolio valued is nearly Rs 4,500 Crs.
Tags : Indiabulls Housing Finance investors deal Oaktree Capital laons non-banking finance