An investor group including Bank of America-Merrill Lynch (BofA-ML) and Edelweiss Asset Reconstruction Co. has bought certain distressed loans of GTL Infrastructure Ltd., paying the banks that held them about Rs1,400cr ($197mn), people familiar with the matter said.
Banks led by Union Bank of India had put up loans with a total face value of Rs4,200cr for sale, and the investor group bought a portion of these, the people said, asking not to be named as the information is not public. The banks took a haircut of more than 40%, another person said.
Indian banks are rushing to sell distressed loans and assets as the authorities force large defaulters into bankruptcy courts. The nation overhauled its bankruptcy code in 2016 and needs foreign capital as lenders burdened with one of the world’s worst bad-loan ratios attempt to clean up their balance sheets.
A spokesman at BofAML declined to comment. A GTL spokesman and a representative for Union Bank didn’t reply to an email seeking comment and a spokeswoman for Edelweiss didn’t answer calls seeking comment on the deal.
GTL Infrastructure share price ended the day at Rs1.57, up Rs0.07, or 4.67%, from its previous close of Rs1.50 on the BSE. The scrip opened at Rs1.57 and touched a high and low of Rs1.57 and Rs1.53, respectively. A total of 10,52,772 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs1,844.09cr.
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