L&T Finance looking for buyers for Rs 880 crore distressed loan portfolio

14 Mar 2023 , 08:23 AM

According to news reports, L&T Finance is looking for buyers for a distressed real estate portfolio that includes loans given to the Pune-based Xrbia Group.

Five companies in the Xrbia Group were given a loan book of Rs 880 crore, according to the reports.

L&T has not established a reserve price for the portfolio while asking asset reconstruction companies to submit expressions of interest (EoI). One of the reports said that the company received six EoIs from ARCs.

The five accounts are Xrbia Developers, which has a debt of Rs435 crore; Xrbia Chakan Developers; Xrbia Warai Developers; Xrbia Ambience Realty LLP; and Eiffel Lifespaces, which has a debt of Rs164 crore; Rs156 crore; and Rs107 crore.

The 15:85 structure, which includes 15% of the consideration in cash and the rest 85% as security receipts (SR) payable on recovery of the loans from the borrower, is the one that L&T Finance has invited offers under.

According to a report by Icra Ratings dated September 21, 2022, the Xrbia group began its real estate business in 1995 and has since completed projects with more than 14 million square feet (MSF) of saleable area. Icra added that there are around 20 Projects in various stages of development, including mid-luxury homes, planning schemes, and cheap housing.

When Icra last provided a rating for Xrbia Developers in May 2019, it changed the outlook for the company’s debt of 350 crore rupees from positive to stable and gave a BBB+ rating. The company changed the account to ‘Issuer not cooperating’ in the same report.

Investors are not informed about L&T Finance’s gross or net non-performing assets in its quarterly statements. According to the company’s presentation to analysts, its gross stage three (GS3) loans were 3,723 crores, or 4.21% of all loans, as of December 31, 2022. According to the same presentation, the GS3 was $5,623 crore during the quarter ending in December 2021.

Loans that are more than 90 days past due and other stressed assets are included in GS3.

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