Apollo Global Management is in advanced talks with L&T Finance Holdings Ltd to acquire real estate loans worth ₹8,000-9,000 crore said people with knowledge of the matter.
The L&T Group company is looking to pivot toward the retail segment by pruning its infrastructure and real estate exposure, they said.
The deal, pegged at $1 billion, will also help L&T get cash upfront instead of through staggered payments, allowing it to deleverage its balance sheet
while the private equity group gets a portfolio of real estate assets with some first-loss protection as well as building a relationship with the engineering giant.
The transaction is expected to get finalized in a few weeks and will be carried out via a newly floated alternative
investment fund AIF structure and will be similar to Apollo's deal
with Piramal Capital & Housing Finance, part of Piramal Enterprises NSE -1.24%, said the people cited above.
The real estate book of listed L&T Finance shrank to ₹11,210 crore in FY22 from 12,945 crore in the previous fiscal year.
Parent L&T owns 66.26% of the financial services arm.
These loans have a 15-16% rupee return on average. Shardul Amarchand Mangaldas and Trilegal are the legal advisors.