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Microfinance firn Spandana Sphoorty set to raise $270 million

LiveMint logoLiveMint 04-04-2017 Sahib Sharma

Mumbai: Microfinance lender Spandana Sphoorty Financial Ltd is set to raise $270 million which will facilitate its exit from the corporate debt restructuring cell (CDR) after seven years, it said in a statement.

Around $100 million will come in the form of equity capital from a Kedaara Capital-led consortium including Ontario Teachers’ Pension Plan, and the rest in the form of debt capital from IndusInd Bank Ltd, Yes Bank Ltd and ICICI Bank Ltd, the statement said.

Spandana is one of the five microfinance companies referred to the corporate debt restructuring (CDR) cell after Andhra Pradesh in 2010 passed a law tightening rules for the industry that extends small loans to low-income earners.

The law, in response to reports that coercive loan recovery practices were causing overextended borrowers to kill themselves, triggered a wave of defaults in Andhra Pradesh, then the biggest market for microlenders.

As reported by Mint on 17 March, Spandana is in talks with private equity firm Kedaara Capital Investment Managers Ltd to sell a more than 26% stake in the company.

Also Read: Kedaara Capital eyeing stake in microfinance firm Spandana Sphoorty

Unitus Capital was the exclusive financial advisor to Spandana for the exclusive equity investment.

At the end of December quarter, Spandana had a loan portfolio of Rs.1,287 crore and 524 branches spread across 13 states.

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