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Kotak Halts Bid for Altico as India Struggles With Banking Crisis

Altico Capital India Ltd. is one of the latest caught up in India’s shadow banking crisis which was started in 2018. Kotak Investment Advisors Ltd. won’t make a binding bid for Altico by 15 January deadline, as per people familiar with the matter. Non-bank financiers in India plays an important role in everything funding from condominium construction to purchase personal goods such as cars and phones. Real-estate focused restructuring of Altico and sale process comes under broader shadow bank crisis drags on, hurting the property sector and the economy. In September, the non-bank lenders have trouble piling up since it started defaulting. Cerberus Capital Management LP and SSG Capital Management are now the only remaining external bidders, highlighting dwindling interest in Mumbai-based Altico which is grappling with soaring bad loans. Kotak halted work on a binding bid for Altico after getting adverse feedback from creditors, the people said. Mumbai-based Kotak’s indicative offer hinged on a purchase of either part or all of Altico’s loan portfolio also said.
Cerberus Capital and SSG Capital are now competing with an Altico shareholder-sponsored group to take over the shadow lender after two other firms pulled out. Creditors will meet on Wednesday to discuss how the winning bidder will be decided, one of the people said.
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