Piramal gets premium for Rs 531 crore residual bad loans
Piramal Group has sold residual bad loans worth ₹531 crore of its Advantage Raheja exposure, which includes properties such as a JW Marriott hotel in Bengaluru and a Crowne Plaza unit in Pune.
These loans have been sold to Omkara Asset Reconstruction Co., giving Omkara full ownership of all loans linked to this exposure. These loans, reflected as receivables in the form of security receipts (SR) on Piramal's books, are now being sold for upfront cash.
Empower Your Corporate Journey with Strategic Skill Courses
Offering CollegeCourseWebsiteIIM KozhikodeIIMK Chief Product Officer ProgrammeVisitUniversity of Western AustraliaUWA Global MBAVisitIndian School of BusinessISB Venture Capital and Private Equity ProgramVisitThe deal concluded recently was done at a premium, where Piramal made over ₹700 crore on the sale.
The loan had previously been sold to Omkara ARC, and the ARC made partial payments to Piramal both in cash and security receipts, which would be paid when the loans are recovered. Piramal recently put up for sale security receipts worth ₹531 crore, initially acquired by Omkara ARC for an all-cash payment.
Piramal had called bids and Omkara offered to buy the SRs in an all-cash deal at a premium. Therefore, Piramal sold the SRs from its book, said a source.
Piramal had earlier sold these loans in a structured deal. The loan sale was done in a 15:85 structure, with 15% paid in cash and the remaining issued as SRs. Here, Omkara ARC paid around ₹100 crore in cash and about ₹531 crore in the form of Security Receipts (SRs). SRs are financial instruments that are quasi-debt and paid to the lender by ARCs as they are recovered.
Spokespersons of both Piramal and Omkara did not immediately respond to requests for
