The US-based hedge fund Avenue Capital Group is picking up 26 per cent stake in SKIL Infrastructure for around $500 million, reports The Economic Times. SKIL is promoted by Nikhil Gandhi. The firm owns Pipavav Shipyard, besides it’s undertaking a $2.1 billion tourism project in Himachal Pradesh.

The $12-billion Avenue Capital has raised $2 billion to invest exclusively in Indian infrastructure sector (probably the entire Asia region), says ET. The fund is believed to be investing in SKIL through compulsory convertible bonds with a five-year tenure.The deal was syndicated by Ernst & Young. Post-conversion, a 72 per cent stake in SKIL will be held by the Gandhi family, 2 per cent by a few US-based high net worth individuals, and the remaining 26 per cent by Avenue. SKIL will invest the capital in sectors such as tourism infrastructure, civil aviation and maritime infrastructure.

Pipavav Shipyard recently received $75 million investment from three foreign financial investors — New York Life, Indus Capital and Trinity Capital. The company is also reportedly in talks with another US-based investor for $25 million. Post-investment, the shareholding in Pipavav will look like this: the four investors 40 per cent, SKIL 35 per cent, and financial institutions such as IL&FS, IDBI and Exim Bank 25 per cent.

Avenue Capital already has a few investments in India. It acquired 100 per cent stake in GPI Textiles, a sick firm owned by the Mittals of the Ispat Group, for Rs 200 crore in September 2006. Avenue also has a stake in cardiologist Naresh Trehan’s Rs 1,000-crore ‘Medicity’ project in Gurgaon, and a 16 per cent stake in engineering firm Punj Lloyd, which it acquired for about Rs 138 crore.

Posted on 06/2/07, 12:10 PM
in: Deals, Main Page, Private Equity
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