Altico Capital submits resolution plan for full repayment over five years

Real-estate focused Altico Capital submitted its resolution plan to lenders as the steering committee led by SBI met the management on Wednesday late evening. The non-banking finance company has proposed to repay in full in a staggered manner over next five years, two people with the direct knowledge of the matter told ET.

While banks may be repaid using funds from proposed asset monetization, mutual funds like Nippon India or UTI MF could be issued upfront bonds. "The company believes in reviving its financials through asset monetisation as they bat for their expertise in dealing with real estate builders," said one of the persons cited above. "The equity value should go up only when lenders are paid off, and that is how Alitco intends to do," said the executive present in the meeting.

Mashreq Bank, Yes Bank, Bank of Baroda are among other lenders in the committee of eight-nine such banks. There are over two dozen lenders that lent the company, backed by foreign private equity investors including Abu Dhabi Investment Authority (ADIA), Clearwater Capital and Varde. Altico did not reply to ET's query on the matter. Individual lenders could not be contacted immediately for comments.

The lenders may take a few weeks to give their feedback on the proposed resolution plan. In the meeting, lenders asked Altico not to stop loan disbursements to good and running projects said another person. If it pauses, those constructions too will be stuck leading to further chocking of cash flows in the company. Altico has collected about Rs 100 crore in past one month as repayments from its borrowers. The monthly inflows should remain in the range of Rs 80-100 crore, sources said.

Altico credit exposure is yet to turn non-performing asset in bank books. The company has about Rs 800 crore repayment liabilities until December. Its total outstanding debt stands at Rs 4,361.5 crore.

Altico's asset sales could immediately fetch at least Rs 2,000 crore as the company aims to sell some of its real estate projects. After the latest rating downgrades, some lenders recalled about Rs 1,500 crore worth of credit lines earlier committed to Altico, putting pressure on the non-bank lender to repay immediately. In the resolution plan, it sought cancellation of such recall notice citing the existing liquidity squeeze and future growth plans. It is also expected to diversify into retail lending in the housing finance sector. Also, Altico insisted on it existing shareholders' commitment in running the business.

Altico last month defaulted on interest payments of Rs 19.97 crore, causing its liquidity position to worsen. Alvarez & Marsal has suggested it remain a going concern by conserving cash and quickly sell assets, helping draw a private equity investor. SSG Capital, Brookfield, Cerberus, and Apollo Global are among private equity investors keen on a stake in the company.