Spandana Sphoorty Moves To Clean Up Stressed Loans With Rs 133 Crore ARC Portfolio Transfer

Spandana Sphoorty Financial Limited has informed the stock exchanges that the Management Committee of the Board has approved the transfer of a stressed loan portfolio, including written-off loans, to an Asset Reconstruction Company. The stressed pool, with an outstanding written-off portfolio of about Rs 372.45 crore as on 31 December 2022, will be transferred for a consideration of Rs 133 crore on a security receipt basis.

The lender plans to execute the transaction through the Swiss Challenge method, following applicable regulatory guidelines and its internal policy framework. This move is aimed at accelerating balance-sheet clean-up, improving asset quality metrics and sharpening management focus on fresh business growth in its core microfinance franchise.

Key Highlights / Important Takeaways

• Outstanding written-off stressed loan portfolio of about Rs 372.45 crore identified for transfer to an Asset Reconstruction Company.
• ​Binding bid of Rs 133 crore received from an ARC on security receipt consideration basis for the stressed pool.
• ​Sale to be conducted using the Swiss Challenge method in line with regulatory guidelines and the company’s stressed-asset resolution policy.
• ​Transaction expected to support continued improvement in asset quality and capital efficiency for the microfinance-focused NBFC.

Sources: BSE Limited, Spandana Sphoorty Financial Ltd