Rajiv Rattan buys Lone Star's stake in NBFC for Rs 611 crore
Rajiv Rattan, one of the founding members of Indiabulls, has acquired a 50% stake of its joint venture (JV) partner Lone Star Funds in RattanIndia Finance for Rs 611 crore (about $73 million) in an all-cash deal, multiple persons with knowledge of the development.
The rift between the two was triggered three years ago after Lone Star alleged that Rajiv Rattan had misused money belonging to the company.
Rattan, also the promoter of RattanIndia Power, has denied any wrongdoing.
In May 2021, the global private equity fund firm approached the Delhi bench of the National Company Law Tribunal (NCLT) against RattanIndia Finance, alleging irregularities and mismanagement in the company.
Countering this, Rajiv Rattan, the chairman of the non-bank entity, argued that the foreign investors had filed the case to negotiate an exit as they were no longer keen to continue the 50-50 JV.
A joint statement issued by both partners on Thursday stated, «As part of the settlement, Rajiv Rattan and RattanIndia Finance shall provide a full exit to Rose Investments (affiliate of Lone Star Funds) for an agreed consideration and the parties shall approach the relevant authorities to approve the same.»
The joint statement did not mention the settlement amount. RattanIndia Finance transferred Rs 611 crore early this week in an escrow account with Kotak Mahindra Bank, one of the persons cited above said.
For Lone Star Funds, the transaction will imply a haircut on its investments in the JV.
The global private equity fund invested $100 million in the JV in 2018 and received $73 million in 2023. The finance company had not declared any dividend during its operations.
Both partners will make a joint application with the tribunal to withdraw the
