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RBI said to have approved sale of DHFLs edu loan company to Warburg

Mumbai: The Reserve Bank of India is said to have approved the proposed selling of a DHFL group company to US private equity major Warburg Pincus giving a lifeline to the embattled housing finance group, said two people with the direct knowledge of the matter.

The sale should release about Rs 1,000-1,200 crore immediately, facilitating payments that have fallen overdue, they said.

“The central bank has put its seal on the deal Tuesday, which in turn should enable the flagship company to meet immediate debt obligation,” one of the persons cited above, told ET.

Avanse Financial Services primarily extends education loans. While Dewan Housing Finance (DHFL) owns 30.6 per cent in the company, Wadhawan Global Capital, the holding company, holds 49.04 per cent.

On March 16, the parent company decided to sell its education loan arm to US private equity major Warburg Pincus. The company has been valued at about Rs 1,000-1,100 crore. Both entities have exited, making cash available for the troubled group in dire need of money. The rest onefifth stake is held by International Finance Corporation.

Emails sent to DHFL and the RBI remained unanswered until the publication of this report.

The total portfolio of Avanse was Rs 2187 crore as on March 31, 2018, compared with Rs 982 crore in the preceding financial year. Education loans formed 89 per cent of the total portfolio, data from the company website showed while overall disbursement for the year more-than-doubled to Rs 1,517 crore.

Besides Warburg Pincus, Kedaara Partners, CX Partners and Centrum Capital too were in discussions to acquire the stake up Read More – Source
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