Cerberus Capital Management’s planned purchase of Apollo Global Management’s asset reconstruction company in India has stalled, according to people familiar with the matter.

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The US firm’s Indian arm decided not to proceed with the deal in October after agreeing to acquire Arcion Revitalization Pvt. for about 2 billion rupees ($24 million), said the people, who asked not to be identified as the information is private.

The decision came as global investors are cooling on India’s asset reconstruction companies, or ARCs, amid the country’s improving bad debt situation and regulatory changes. Only 3.2% of the gross non-performing loans were sold to ARCs in the fiscal year ended March 31, 2022, according to the Reserve Bank of India, compared to 3.8% two years earlier and before Covid struck.

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Cerberus remains generally interested in acquiring distressed assets in India, while Apollo could revive the sale of the unit later, the people said. A representative for Apollo declined to comment. A representative for Cerberus didn’t immediately respond to requests for comment.

Arcion Revitalization is a joint venture set up by Apollo Global and ICICI Bank Ltd. in 2018 with the goal of buying sour debt from banks in India. New York-based Cerberus manages about $60 billion of assets globally, according to its website. The firm has deployed more than $34 billion in stressed and distressed investments since it’s founded in 1992.

Cerberus was among bidders for India’s Yes Bank Ltd.’s bad loan portfolio last year but it dropped out later, according to local media reports. In July, Yes Bank agreed to sell the portfolio to J.C. Flowers & Co. for 480 billion rupees. The lender’s board approved the transaction in September.

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(Edited by : Asmita Pant)