M&A

M&A

Piramal to sell Rs.5,546-Cr DHFL loans to JM Financial ARC for Rs.2,550-Cr

Economic Times  

Piramal Capital & Housing Finance will sell its INR 5,546-crore bad loan portfolio inherited from Dewan Housing Finance (DHFL) to JM Financial Asset Reconstruction Company. JM Financial ARC has offered to purchase the portfolio for INR 2,550 crore, equating to a 46% recovery rate. JM Financial ARC's purchase consideration comprises 15% in cash and 85% in security receipts that will be subscribed by either Piramal Capital or its affiliates. These receipts act as quasi-debt instruments that are redeemed when the ARC recovers the underlying debt. Piramal Capital has been actively selling bad loans to clean up the stressed book of DHFL, which it had acquired in a bankruptcy auction in September 2021 for INR 34,250 crore.