Kahitan & Co. advised Centrum Microcredit Limited (CML) in relation to acquisition of the entire microfinance business by CML of Altura Financial Services Limited by way of a business transfer arrangement for a total consideration of USD 14 million. Post the acquisition, CML will have a loan portfolio of around INR 400 crore across 126 branches, servicing 2 lac clients.

Firm advised Centrum on all legal aspects of the transaction including (i) structuring the deal in compliance with RBI Regulations relating to micro finance; (ii) transfer of the entire business undertaking of Altura Financial Services Limited to Centrum Microcredit Limited; (iii) drafting, negotiating and finalizing the business transfer agreement and other ancillary agreements; and (iv) fulfilment of conditions precedent and closing documentation and formalities.

Innovative Feature of the transaction: (1) Purchase consideration mechanism – which was based upon several variables, including variation to the loan portfolio (2) Structuring of the transaction in view of the multiple requirements for undertaking a transfer of assets/business of a microfinance entity under the NBFC master directions.

Team involved Niren Patel (Partner), Shreya Mukherjee (Senior Associate) and Agranee Kapoor (Associate).