GE Capital India to sell business to consortium of Aion and former execs
03 Mar 2016
General Electric Co is selling its commercial lending and leasing businesses in India, GE Capital India, to a consortium of former GE Capital executives and Aion Capital Partners as part of the company's plan to exit non-core businesses.
Aion has partnered former GE Capital executives Pramod Bhasin and Anil Chawla to form a new company, Plutus Financials, for the acquisition.
The new company will acquire the commercial lending business of GE Capital in India for an undisclosed amount.
Bhasin was formerly the head of GE Capital in India and Asia. Chawla was the head of the commercial business operations of GE Capital India.
Aion is a joint venture between ICICI Venture and Apollo Global Management.
The transaction involves investments in businesses such as auto leasing, healthcare financing and corporate lending and leasing worth about $400 million.
"We would like to use new technologies to penetrate deeper into Indian markets to build consumer finance besides providing lending to small and medium enterprises," said Bhasin, who was formerly the head of GE Capital in India and Asia, having earlier worked with it in the US.
He started GE Capital's businesses in India. Bhasin is also considered a pioneer of the business process outsourcing sector in India, having started GE Capital International Services. It subsequently became Genpact, where he was president and chief executive officer until 2011.
Bhasin expects to close the deal in eight months, after all due approvals.
Chawla was head of the commercial business operations of GE Capital India. Later, he helped DE Shaw build its financial services business in India.
Aion is a strategic partnership between affiliates of ICICI Venture and Apollo Global Management and is one of the largest private equity funds focused on India, with approximately $825 million in committed capital.
In India, GE's financial services business is spread across a joint venture with State Bank of India for credit cards, and consumer finance through GE Money, besides GE Capital Services that is into commercial finance.
Media reports quoting market sources put the value of the transactions at $350 million.
Plutus Financials will absorb all of GE Capital's existing employees, who will be relocated to its different offices.