Brookfield may take over Rs 1,500-crore Piramal loan to Bengaluru realtor

In one of the largest among refinancing deals, Canada-based Brookfield Asset Management is in talks with Piramal Capital & Housing Finance to take over a loan given to Bengaluru-based Adarsh Developers, say sources. The debt is around $200 million or Rs 1,500 crore.

Significant because refinancing deals had almost stopped for non-banking financial companies after the IL&FS defaults in September 2018, leading to a liquidity crunch in the segment. “It is part of Piramal’s strategy to reduce single borrower exposure and reduce the share of big-ticket loans in real estate,” said the sources.

The terms of the proposed deal are not known. Brookfield declined to comment when asked. E-mails to Piramal did not elicit a response. B M Jayeshankar, chairman of Adarsh Developers, said the deal was in the initial stages. 

Brookfield is steadily building a credit portfolio in real estate. It has built a loan book of $1 billion in the past couple of years. In 2017, it lent Rs 800 crore to property developer Total Environment of Bengaluru. In 2018, it invested $100 million in a bunch of housing projects of Hyderabad-based INCOR. 

Recently, it bought a 40 per cent stake in Indostar Capital Finance for Rs 1,450 crore. 

According to sources, Brookfield has also taken over some loans of lender DHFL from Oaktree Capital. Brookfield bought a majority of US-based Oaktree last year. DHFL had sold some of its loans to Oaktree and was in the process of selling its wholesale book to the US-based investor. As mentioned earlier, Piramal Capital & Housing Finance has been reducing the share of wholesale real estate loans in its portfolio and single borrower exposure. At end-December 2019, the share of wholesale loans to real estate developers was 70 per cent. 

Last year, it sold loans worth Rs 2,000 crore, given to Lodha Developers (now Macrotech), to Goldman Sachs.  Piramal is also in talks with other investors to sell its big-ticket loans, according to recent reports.

Last year, Adarsh raised money from JM Financial, Kotak Realty Fund, HDFC Property Fund and Piramal Capital to expand its portfolio.