AION, for­mer GE ex­ec­u­tives to buy GE Cap­i­tal's fi­nance unit

The Pak Banker - - COM­PA­NIES/BOSS -

MUM­BAI: AION Cap­i­tal Part­ners (AION), an In­di­afo­cused spe­cial sit­u­a­tion fund, along with for­mer GE Cap­i­tal ex­ec­u­tives Pramod Bhasin and Anil Chawla, will ac­quire the fi­nan­cial ser­vice busi­nesses of GE Cap­i­tal In­dia, the com­pany said on Wed­nes­day.

While the fi­nan­cial de­tails of the deal have not been dis­closed, a per­son close to the trans­ac­tion said the trans­ac­tion is val­ued at be­tween $300 mil­lion and $350 mil­lion. The busi­ness com­prises auto leas­ing, health­care fi­nanc­ing and cor­po­rate lend­ing and leas­ing.

Bhasin was for­merly the head of GE Cap­i­tal in In­dia and Asia, hav­ing ear­lier worked with GE Cap­i­tal in the US. He started GE Cap­i­tal's busi­nesses in In­dia. Bhasin started GE Cap­i­tal In­ter­na­tional Ser­vices which sub­se­quently be­came Gen­pact Ltd, where he was the pres­i­dent and chief ex­ec­u­tive of­fi­cer un­til 2011. Gen­pact is cur­rently listed on the NYSE.

Chawla was the head of the com­mer­cial busi­ness op­er­a­tions of GE Cap­i­tal In­dia. The AION Fund, with ap­prox­i­mately $825 mil­lion in com­mit­ted cap­i­tal, was es­tab­lished by ICICI Ven­ture and Apollo Global Man­age­ment Llc. Last year, AION Cap­i­tal had in­vested Rs.600 crore to buy an undis­closed stake in Varun Bev­er­ages Ltd, a lead­ing man­u­fac­turer of bev­er­ages in In­dia and the bot­tlers of Pepsi in In­dia. AION Cap­i­tal has also in­vested in Jy­oti In­ter­na­tional, Avan­tha Hold­ings and My­trah En­ergy.

Pri­vate eq­uity in­vestors re­main bullish on the bank­ing, fi­nan­cial ser­vices and in­sur­ance (BFSI) sec­tor. Ac­cord­ing to a re­cent Bain & Co. re­port, PE in­vest­ments in the BFSI seg­ment dou­bled in 2015 to $3.7 bil­lion from $1.9 bil­lion in 2014.

"The pri­vate eq­uity in­ter­est in the fi­nan­cial ser­vices space re­mains very high, al­though they are valu­ing the as­sets more con­ser­va­tively mir­ror­ing the global and In­dian eco­nomic en­vi­ron­ment," said Ra­jeev Suneja, part­ner, fi­nan­cial ser­vices, at ad­vi­sory firm EY In­dia.

Started in 1993, GE Cap­i­tal's non-bank fi­nance com­pany op­er­a­tions in In­dia have served more than 10 mil­lion cor­po­rate and con­sumer fi­nance cus­tomers, the com­pany state­ment said. In In­dia, GE's fi­nan­cial ser­vices busi­ness has a joint ven­ture with State Bank of In­dia for credit cards, while GE Cap­i­tal han­dles con­sumer fi­nance through GE Money and also runs the com­mer­cial fi­nance busi­ness.

Par­ent com­pany GE has been in process of sell­ing the busi­nesses of GE Cap­i­tal across ge­ogra­phies. On Tues­day, GE com­pleted the pre­vi­ously an­nounced sale of the ma­jor­ity of its North Amer­i­can com­mer­cial lend­ing and leas­ing busi­nesses to Wells Fargo and Co.

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