lone star: Rajiv Rattan buys Lone Star’s stake in NBFC for Rs 611 crore

Ending an extended and bitter dispute, Rajiv Rattan, one of many founding members of Indiabulls, has acquired a 50% stake of its three way partnership (JV) associate Lone Star Funds in RattanIndia Finance for Rs 611 crore (about $73 million) in an all-cash deal, a number of individuals with data of the event.

The rift between the 2 was triggered three years in the past after Lone Star alleged that Rajiv Rattan had misused cash belonging to the corporate.

Rattan, additionally the promoter of RattanIndia Energy, has denied any wrongdoing.

In Could 2021, the worldwide non-public fairness fund agency approached the Delhi bench of the Nationwide Firm Legislation Tribunal (NCLT) in opposition to RattanIndia Finance, alleging irregularities and mismanagement within the firm. Countering this, Rajiv Rattan, the chairman of the non-bank entity, argued that the international traders had filed the case to barter an exit as they have been now not eager to proceed the 50-50 JV.

A joint assertion issued by each companions on Thursday said, “As a part of the settlement, Rajiv Rattan and RattanIndia Finance shall present a full exit to Rose Investments (affiliate of Lone Star Funds) for an agreed consideration and the events shall strategy the related authorities to approve the identical.”

The joint assertion didn’t point out the settlement quantity. RattanIndia Finance transferred Rs 611 crore early this week in an escrow account with Kotak Mahindra Financial institution, one of many individuals cited above mentioned.

For Lone Star Funds, the transaction will suggest a haircut on its investments within the JV. The worldwide non-public fairness fund invested $100 million within the JV in 2018 and acquired $73 million in 2023. The finance firm had not declared any dividend throughout its operations.

Each companions will make a joint software with the tribunal to withdraw the case following which they are going to search approval from the Reserve Financial institution of India, the identical individual mentioned.

The corporate had Rs 1,250 crore money steadiness and a mortgage e book of ₹50 crore. It can dip into this money steadiness to pay Lone Star.

Variations between the companions started someday in 2020, however by the primary quarter of 2021, they determined to half methods, the folks cited above mentioned. Rajiv Rattan provided $40 million for Lone Star’s 50% and later improved it to $60 million. The PE demanded $70 million. In September 2021, Rajiv Rattan provided $65 million on the situation that Lone Star withdraws all of the authorized circumstances filed in opposition to him and his firm.