(Bloomberg) -- Deutsche Bank AG and a Singapore based hedge fund bought more debt of an embattled Indian shadow lender, highlighting the growing foreign interest in the discounted assets of the financier at the center of a credit crisis.

Deutsche Bank has almost doubled the debt it holds of Altico Capital India Ltd. to 3 billion rupees ($42.1 million) in the last four months, while Singapore-based Broad Peak Investment Advisers Ltd. has acquired debt of about 1 billion rupees, people familiar with the matter said.

The German lender is now a member of the steering committee of creditors driving Altico’s debt restructuring, the people said, asking not to be identified as the information isn’t public.

Deutsche Bank AG used its larger holding of Altico’s debt to lead pushback against a proposed asset swap, which it said would be conducted in a non-transparent manner and benefit some lenders more than others, according to a person with direct knowledge of the matter. Several other creditors also supported Deutsche Bank’s position, the person said.

Total bids for the asset swap plan ended up covering between 6 billion rupees to 10 billion rupees -- undershooting the 12 billion rupee target based on initial feedback from some interested creditors, another person familiar said.

However, interest in purchases of Altico’s debt has been increasing, even as certain potential bidders for the delinquent financier shy away from an auction process to sell the firm. A shareholder sponsored restructuring plan and an asset swap plan supported by some creditors are also under consideration to salvage Altico.

Altico’s debt had been traded several times over the last few months, as creditors including another local shadow bank Bajaj Finance Ltd., and Abu Dhabi Commercial Bank PJSC sold their holdings, one of the people said. The most recent trade was made at almost half the face value when Abu Dhabi Commercial sold its holding in December, the people said.

Spokesmen for Deutsche Bank, Broad Peak and Altico declined to comment while representatives for Abu Dhabi Commercial and Bajaj Finance didn’t respond to emails seeking comment.

(Updates with Deutsche Bank creditor pushback details from fourth paragraph)

--With assistance from Denise Wee.

To contact the reporters on this story: Bijou George in Mumbai at bgeorge66@bloomberg.net;Rahul Satija in Mumbai at rsatija1@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Anto Antony, Jeanette Rodrigues

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