ARC, backed by Kotak Bank, purchases L-;T Finance's loan portfolio for Rs1,470 crore

15 Jul 2022 , 09:53 AM

According to reports from ET, Kotak Mahindra Bank-backed Phoenix Asset Reconstruction Company (ARC) had bought a distressed loan portfolio totaling Rs1,470 crore rupees from L&T Finance, including two blocked advances to Future Group firms.

Precision Realty Developers and Future Entertainment Ltd. are businesses that make up the Future Group.

According to the individuals mentioned above, L&T Finance recovered roughly 66% when it sold the portfolio of four accounts for Rs980 crore. The other two accounts belong to the engineering, procurement, and construction firm C&C Construction and the real estate developer Sky One Corporate Park.

Clothing companies like Buffalo, Spunk, and AFL are distributed by Future Entertainment.

Future Corporate Resources, the holding company of creator and promoter Kishore Biyani and his family, includes Future Entertainment as a subsidiary. As reported by various reports, Biyani is in discussions with domestic lenders on an out-of-court restructuring of loans for Future Enterprises and Future Lifestyle and Fashion Ltd.

The bankruptcy court has held off on making a decision about Future Retail, the main business of Biyani and an operator of big format stores, being admitted to insolvency proceedings.

The organization that supports the infrastructure for the stores that Future Retail manages is called Precision Realty. However, since Reliance Industries acquired ownership of almost 950 Future Retail locations in March of this year as a result of unpaid rent, Precision Realty’s security value has decreased.

The agreement was finalized last month using the 15:85 structure, in which 15% of the consideration is paid upfront and 85% is paid in the form of security receipts (SR), which would be redeemed when the ARC collects money from defaulting borrowers.