Clix Cap Likely to Buy Reli­gare’s Hsg Fi­nance Arm

Deal, which could be sealed by Sept-end, may help Reli­gare tide over a cash crunch

The Economic Times - - Companies: Pursuit Of Profit - Arun.Ku­mar17 @times­group.com

New Delhi: Clix Cap­i­tal, the com­mer­cial lend­ing and leasing com­pany run by for­mer GE In­dia ex­ec­u­tives Pro­mod Bhasin and Anil Chawla, is likely to buy Reli­gare Hous­ing De­vel­op­ment Fi­nance from Reli­gare En­ter­prises for about ₹ 600 crore.

Reli­gare En­ter­prises, which owns an 87.5% stake in the hous­ing fi­nance firm, is di­vest­ing its own­er­ship in var­i­ous com­pa­nies to tide over a cash crunch. The group re­cently sold its stake in its in­sur­ance ven­ture to pri­vate eq­uity firm True North for about ₹ 1,300 crore.

“The ne­go­ti­a­tion with Clix Cap­i­tal is in the fi­nal stage and Reli­gare is look­ing at con­clud­ing the deal this month or lat­est by Septem­ber-end,” said a per­son in­volved in the ne­go­ti­a­tions. Clix Cap­i­tal is ex­pected to value the hous­ing fi­nance com­pany at a lit­tle over three times its net worth, he added.

A Reli­gare spokesper­son said the com­pany “would not like to com­ment on mar­ket spec­u­la­tion”. Clix Cap­i­tal part­ner Bhasin called it a “rumour”.

In 2016, Bhasin formed a con­sor­tium with Chawla and pri­vate eq­uity firm AION Cap­i­tal to buy GE Money Fi­nan­cial Ser­vices. It was then re­named Clix Cap­i­tal. AION Cap­i­tal Part­ners, a PE fund spon­sored and run by Apollo Global and ICICI Ven­ture, is the main fi­nan­cial backer for Bhasin and Chawla. Bhasin is a for­mer chief ex­ec­u­tive of BPO ma­jor Gen­pact while Chawla had quit as the head of GE’s com­mer­cial fi­nance busi­ness in In­dia to run hedge fund DE Shaw’s lo­cal op­er­a­tions a decade ago.

Reli­gare Hous­ing De­vel­op­ment Fi­nance had a loan book of ₹ 850 crore at the end of March 2016. It re­ported a profit be­fore tax of ₹ 28.7 crore for fis­cal 2016, the lat­est pe­riod for which num­bers are avail­able.

Reli­gare En­ter­prises is a flag­ship com­pany of Malvin­der and Shivin­der Mo­han Singh in the fi­nan­cial sec­tor. The pro­mot­ers own nearly 51% of the com­pany. In ad­di­tion,

Cut­ting Debt

Clix Cap­i­tal is run by for­mer GE In­dia ex­ec­u­tives &

PE AION Cap­i­tal Part­ners is the main fi­nan­cial backer

Clix likely to value the Reli­gare Hous­ing De­vel­op­ment Fi­nance at a lit­tle over 3 times its net worth the two broth­ers also have a con­trol­ling stake in For­tis Health­care, one of the lead­ing hospi­tal chains.

The cash-starved group is in the process of sell­ing stakes in var­i­ous com­pa­nies, in­clud­ing For­tis Health­care. It had en­tered into ex­clu­sive talks with Malaysia-based IHH Health­care to sell For­tis Health­care and SRL Di­ag­nos­tics. How­ever, IHH pulled out of the talks.

The pro­mot­ers have so far sold an about 20% stake in For­tis Health­care in the last six months for about ₹ 2,000 crore. The pro­ceeds were utilised to re­pay loans and in­ter­est of the hold­ing com­pany, RHC Hold­ing, said an­other per­son fa­mil­iar with the de­vel­op­ment.

The group has ini­ti­ated the di­vest­ment ex­er­cises at two lev­els. The hold­ing com­pany, RHC Hold­ing, is en­gaged with var­i­ous suit­ors to di­vest the stake in For­tis or SRL Di­ag­nos­tics. Se­condly, the listed en­tity, Reli­gare En­ter­prises, the hold­ing com­pany for the fi­nan­cial busi­nesses, is sell­ing its own­er­ship in var­i­ous sub­sidiaries to raise funds, which will be used for fund­ing its non-bank­ing fi­nance busi­nesses, par­tic­u­larly those housed un­der Reli­gare Fin­vest.

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