Mumbai, Oct 2 (IANS) Religare Enterprises Ltd (REL), a financial services group, has entered into a share purchase agreement (SPA) for sale of its NBFC business — Religare Finvest — to TCG Advisory Services for Rs 330 crore.
According to the financial services group, the SPA was signed on Tuesday and that the accrued fund will be used to repay the outstanding loans to group companies, third parties and for other general corporate purpose.
“The transaction is subject to receipt of statutory and regulatory approvals and fulfilment of other conditions and is expected to consummate before December 31, 2019, which may be further extended by the parties mutually,” the company said in a regulatory filing on Wednesday.
As per a separate statement, the deal will also settle dispute with Axis Bank, which was restraining the plan to raise capital in its various group companies.
“The divestment of our NBFC business will help conserve capital for the company and allow us to focus on other businesses of the group,” said Nitin Agarwal, Group CFO of REL, and CEO of Religare Broking.
“It’s a win-win deal for REL and TCG, which can help grow the NBFC business with a long-term capital commitment,” Agarwal said in a statement on Wednesday.
In the financial year ended March 31, 2019, RFL reported a total revenue of Rs 795.66 crore.
The development comes after REL, the listed financial services holding company earlier promoted by Malvinder Singh and Shivinder Singh, got mired in controversies due to financial mismanagement by promoters.
Currently, the promoter stake in the company has come down to around 1 per cent and REL has applied for declassifying them as promoters.
The company is now majority-owned by a set of institutional investors and family offices, governed by an independent board. A new management is trying to turn around the fortunes of the group.