U.S.-based distressed asset fund, Avenue Capital, is planning to pick up 27% stake in Asset Reconstruction Company (India) Limited or Arcil — one of the oldest in the business of asset reconstruction in India — in a secondary deal by buying out stake from other small investors.
Avenue will buy stakes in IDFC Bank (8.37%), Government of Singapore’s Lathe Investments (9.9%), Ashmore Capital (1.37%), South Africa’s FirstRand Bank (4.11%), Karur Vyasya Bank (1.96%) and Barclays Bank (1.5%). Avenue has been operating individually in its capacity as a distressed asset fund in the country since 2005.
“We have applied to Reserve Bank of India for its approval,” Vinayak Bahuguna, CEO & MD, Arcil, said. He expects the regulatory approval to come by the end of the current financial year. As a part of the deal, Avenue Capital will get a board seat in Arcil.
State Bank, which has around 20% stake, along with IDBI Bank (19.18%), ICICI Bank (13.26%), and PNB (10.01%), have decided to continue hold onto their stakes in the company. Mr. Bahuguna said the asset under management as on October was ₹12,000 crore.