IFCI offloads 3 hospitality loans to ARCs

Another loan, to Sima Hotels and Resorts (Rs 69 cr outstanding) was bought by Alchemist ARC

To improve its asset profile,  the Industrial Finance Corporation of India (IFCI) has sold three stressed loans, including that to DB Hospitality (Rs 180 crore outstanding), to asset reconstruction companies (ARCs).

A senior IFCI executive said the non-performing loan to DB Hospitality (now Marine Drive Hospitality and Realty Ltd) for a hotel project on Charni Road here had been bought by Edelweiss ARC. He did not specify the terms of the transaction. Another loan, to Sima Hotels and Resorts (Rs 69-crore outstanding) was bought by Alchemist ARC. The loan to Karnal Haveli was sold to Asset Care Reconstruction Enterprise (ACRE). IFCI holds 19.34 per cent stake in Delhi-based ACRE. In a report, rating agency Icra had said selling a few stressed assets to ARCs, as well as a better credit profile of incremental originations, could reduce pressure on IFCI’s asset quality.  The IFCI management was making efforts to sell or divest some of its non-core assets, which could provide a cushion against higher credit provision/write-off of non-performing assets, Icra said. Through FY13, IFCI had reduced loan growth due to a difficult operating environment. However, loan sanctions increased from Rs 2,192 crore in FY13 to Rs 9,717 crore in FY14, while disbursements improved from Rs 1,504 crore to Rs 8,683 crore.

As of March 31 this year, the company’s overall assets stood at Rs 19,255.35 crore. Of this, exposure to the power generation segment was 16.99 per cent, real estate 12.69 per cent and diversified infrastructure 9.15 per cent.

Gross NPA fell from 22.2 per cent in FY13 to 17.30 per cent in FY14. For quarter ended June this year, these stood at 15.63 per cent.