(Bloomberg) -- Apollo Global Management LLC and Varde Partners LP are no longer considering bidding for Altico Capital India Ltd., according to people familiar with the matter, narrowing the number of suitors for the troubled shadow lender.
The firms pulled out because they were unwilling to meet creditor demands to inject as much as 20 billion rupees ($280 million) of fresh equity into Altico, two people said, asking not to be identified as the information is private. A spokesman for Apollo confirmed its withdrawal while Varde declined to comment.
That leaves Cerberus Capital Management LP, SSG Capital Management, and Kotak Investment Advisors Ltd. in the race for the real-estate focused lender, three people said. Representatives for Cerberus, SSG and Kotak declined to comment.
Altico’s troubles follow a spate of defaults among Indian shadow banks over the last 16 months, making it harder for the sector to raise funds. The cash crunch is also spilling over into the broader economy, given that these lenders fund everything from the construction of condominiums to purchases of personal goods like cars and phones.
Apollo was only willing to inject part of the money creditors sought, while Varde wanted to wait for a turnaround in Altico before investing, two people said.
Without the funds, Altico may have to leave some projects only partly financed, which could ripple onto the developers and hurt their ability to repay their loans. Altico had given out 68.9 billion rupees of loans to 34 borrowers as of June.
(Updates with Altico loan book in final paragraph)
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