Kotak Mahindra Bank-backed Phoenix Asset Reconstruction Company (ARC) has acquired a distressed loan portfolio of Rs1,470 crore from L&T Finance, including two stuck advances to Future Group entities
The Future Group companies are Precision Realty Developers and Future Entertainment Ltd.
L&T Finance sold the portfolio of four accounts for Rs 980 crore, equating to a recovery of nearly 66%, the people cited above said. The other two accounts are C&C Construction, an engineering, procurement and Construction Company, and Sky One Corporate Park, a realty developer.
Future Entertainment houses apparel brands such as Buffalo, Spunk and AFL. . As a sole lender, the acquirer can control the recovery process.
Future Entertainment is a subsidiary of Future Corporate Resources, the holding company of founder promoter Kishore Biyani and his family. Biyani is in talks with domestic lenders for an out-of-court restructuring of loans for Future Enterprises and Future Lifestyle and Fashion Ltd,
The bankruptcy court has reserved an order for admission of Biyani’s flagship company Future Retail which operates large format stores, for insolvency proceedings. Precision Realty is the company that provides infrastructure support to the stores that Future Retail operates. However, the security value of Precision Realty has diminished after Reliance Industries took control of nearly 950 Future Retail stores in March this year due to non-payment of rentals.
L&T sold Rs 339 crore outstanding loans of Future Entertainment and Rs111 crore Precision Realty's loans, the first person cited above said. The other loan accounts include a Rs 405 crore C&C Construction loan and Rs 615 crore Sky One Corporate Park loan
The deal was sealed last month under the 15:85 structure, wherein 15% of the consideration is paid up front, and 85% is paid in the form of security receipts (SR) to be re deemed when the ARC recovers money from defaulting borrowers