Acre ARC buys over Rs 3,000-crore of bad loans

Mumbai: Hong Kong-based $8 billion alternative investment fund Ares SSG-backed Acre Asset Reconstruction Co (ARC) has purchased loan portfolios from a clutch of banks and non-banking finance companies in multiple deals completed in the quarter ended June 2022, aggregating to more than ₹3,000 crore and swelling the ARC's assets under management (AUM) to close to ₹12,000 crore.

The portfolios include ₹1,100 crore from Indiabulls Home Finance, consisting of home loans and loans to builders, and ₹1,200 crore of commercial vehicle loans from IndoStar Capital Finance, two people familiar with the transactions said.

These transactions include ₹580 crore of corporate loans from HDFC and ₹200 crore of loans from private equity giant Kohlberg Kravis & Roberts Co's (KKR) of engineering company Walchandnagar Industries (WIL). Both of these transactions were reported by ET in June and April respectively.

Acre did not respond to an email seeking comment.

"These loans have been bought at between 40 to 70 cents to a dollar and have catapulted Acre to number three among ARCs with AUM of ₹12,000 crore," said one of the persons cited above.

ARCs usually buy debt at a haircut with an aim to recover more than what they have paid for the loans.

Acre will recover or restructure these loans either by paying a fee to service providers or by working with the borrowers to find a workable repayment schedule.

These loans also include small purchases from public sector banks.

Individual sellers of loans could not be immediately contacted.