The Reserve Bank of India has approved Areion Group's proposed ₹936-crore acquisition of fraud-hit mortgage lender Aviom India Housing Finance, clearing a key regulatory hurdle in the resolution process. According to reports from The Economic Times, the banking regulator has also granted its 'fit-and-proper' approval to Areion Group promoter Manish Lalwani, a mandatory requirement for a change in control of a regulated financial institution. The approval effectively removes the biggest regulatory overhang in the transaction, allowing the resolution process to move to the National Company Law Tribunal (NCLT) for final approval. As per The Economic Times, the RBI's approval comes after Areion Group had approached the regulator seeking fit-and-proper assessment for the proposed acquisition, with the approval bringing the acquisition a step closer to completion.
As reported by The Economic Times, Areion Group emerged as the successful bidder for Aviom after secured lenders unanimously backed its resolution plan over a higher but conditional bid from Unity Small Finance Bank. Areion's unconditional ₹936-crore offer is expected to result in a recovery of about 65% for Aviom's lenders. The lenders opted for Areion's proposal because it was unconditional and offered greater certainty of execution, despite Unity Small Finance Bank's higher bid of ₹977.5 crore during the challenge auction. The Economic Times had first reported on February 10 that Areion Group had emerged as the successful bidder, with the company declining to comment on the latest regulatory approval.
According to The Economic Times, Areion Group has appointed Suresh Khatanhar as group chief executive officer. Khatanhar, the former deputy managing director of IDBI Bank, will lead the group's strategy, business expansion and operations. The acquisition brings Areion Group a step closer to completing the transaction, with the resolution process now proceeding to the NCLT for final approval.
As reported by The Economic Times, Aviom was admitted to the corporate insolvency resolution process by the RBI in February last year after the affordable housing finance company defaulted on its debt obligations. The company's troubles surfaced after auditors flagged discrepancies in its books, prompting investigations by the National Housing Bank (NHB). The housing regulator subsequently found that Aviom had overstated its mutual fund investments to inflate cash balances on its books, with these developments triggering wider regulatory scrutiny of the lender. The Economic Times had first reported these developments in November last year, with the housing regulator's findings prompting the resolution process that ultimately led to the current acquisition.
