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Blackstone to acquire Aadhar Housing Finance
The Times of India  |  February 4, 2019

M Allirajan Coimbatore

Wadhawan Global Capital (WGC), the parent company of Dewan Housing Finance (DHFL) has agreed to sell the entire 70% stake in Aadhar Housing Finance (AHFL), its affordable housing finance arm, to global private equity (PE) giant Blackstone for an undisclosed sum. DHFL, the flagship entity of WGC Group, which holds a 9.15% stake in AHFL, will also be exiting the company as a part of the transaction.

 

“Private equity funds managed by Blackstone have entered into a definitive agreement with WGC to acquire its stake in its housing finance subsidiary, Aadhar Housing Finance (AHFL). As a part of the deal, WGC will be selling the entire 70% of its stake,” the company said. “The deal will significantly reduce WGC’s outstanding corporate debt,” it said.

 

The move comes days after investigative portal Cobra Post alleged a Rs 31000 crore scam by the promoters of DHFL. The DHFL scrip tanked 18% on the BSE and 18.5% on the NSE touching its 52-week low on Friday. The DHFL stock has lost over 83% in value since September when the default by infrastructure lending major IL&FS squeezed liquidity for non-banking finance companies and housing finance companies pushing up borrowing costs.

 

“The transaction with Blackstone is a part of our multi-pronged strategy to reduce the corporate debt levels and strengthen our balance sheet,” said Kapil Wadhawan, chairman, WGC. “The sale unlocks the latent value within the WGC Group while reinstating our immediate and long-term focus on DHFL, the flagship company of the group,” he said.

 

AHFL reported a net profit of Rs 80 crore in the first half of 2018-19 and had assets under management of Rs 9259 crore at the end of September 2018. Blackstone is one of the world’s leading PE firms, with $472 billion in assets under management, including investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. It has been active in India since 2006.