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L&T Finance has sold Rs 3463 crore of non-performing assets to Kotak Mahindra Bank-backed Phoenix ARC Pvt in the last week of March. The non-banking finance firm had invited four pools of stressed loans aggregating to Rs 5,238.7 crore. Phoenix ARC has acquired three pools out of 4.
The sale has been done as finance companies are brought within the purview of stricter bad-loan norms that apply to traditional lenders.
L&T Fianance has sold Rs 3,463 crore of the distressed loan portfolio for Rs 1,120 crore under the conventional 15:85 structure. The asses reconstruction company will pay L&T Finance 15 percent of the consideration upfront and redeem the security receipts as they recover dues from the defaulting borrowers.
