MUMBAI: Areion Group has successfully secured the bid for Aviom India Housing Finance, a mortgage lender embroiled in fraud issues, after secured lenders unanimously favored its resolution proposal over a higher but conditional offer from Unity Small Finance Bank, according to sources familiar with the situation. Areion’s ₹936-crore bid is projected to enable a recovery of around 65% for Aviom’s lenders.
Despite Unity Small Finance Bank initially offering the highest bid of ₹977.5 crore during the competitive auction, secured lenders supported Areion Group’s unconditional proposal. The preference was influenced by Unity’s conditional offer, which raised concerns about execution, as confirmed by insiders.
Representing 98.2% of the value, secured lenders collectively approved Areion Group’s proposal, which runs an alternative investment fund via Areion AMC and an asset reconstruction firm through Omkara ARC. An insider noted, “Even though Unity Small Finance Bank had the highest bid, lenders favored Areion’s unconditional offer. The conditions tied to Unity’s proposal sparked doubts regarding execution, leading lenders to prioritize recovery certainty over a higher bid amount.”
Unsecured lenders did not participate in the voting procedure.
According to sources, lenders expressed discomfort with the multiple conditions attached to Unity’s proposal. Areion Group, Unity Small Finance Bank, and the administrator, Ram Kumar, have declined to comment.
Multi-Cornered Contest
Initially, six entities showed interest in acquiring Aviom India under the National Company Law Tribunal (NCLT)- overseen resolution process, but only three engaged in the auction that concluded recently.
During the auction held in late December, Unity was declared the highest bidder after 13 rounds, offering ₹977 crore. Areion and Authum dropped out after final bids of ₹936 crore and ₹850 crore, respectively. The administrator has processed 60 claims totaling ₹1,363 crore, with LIC Housing Finance having the largest share at 7.2%. Other lenders like HDFC Bank, Kotak Mahindra Investments, and Tata Capital have exposures below 3%. The Reserve Bank of India had accepted Aviom into the corporate insolvency resolution process under the Insolvency and Bankruptcy Code in February after the housing finance company started defaulting on loans. Aviom’s issues surfaced when auditors identified discrepancies in its financial records, prompting investigations by the National Housing Bank.
