Kochi-headquartered Muthoot Finance has sold a gold loan portfolio of INR 725 crore to Asset Reconstruction Company of India (Arcil). It will receive 15% of the consideration in cash and the balance is in the form of security receipts.
This is the first time a gold loan portfolio is being sold by a lender to an ARC. Muthoot did not take a significant haircut as gold value has appreciated. The transaction is structured in a way that upside would be shared by the Avenue Capital-backed ARC with the finance company.
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