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The joint venture investment entity owns 3.29% in Mahindra Forgings, the auto component firm of the Mahindra group.

India-focussed, AIM-listed private equity fund Elephant Capital (formerly Promethean India Plc) is taking full control of a Mauritius joint venture investment entity that, in turn, owns 3.29% in Mahindra Forgings, the auto component firm of the Mahindra group.

The AIM-listed fund owns 40% in Elephant Capital 1 with the remaining 60% held by Puneet Makkar (the promoter of Amforge Industries that sold one of its units to Mahindra Forgings a few years ago).

Makkar, who separately owns 2.67% in Mahindra Forgings, had taken a loan of £3.7 million (in June 2007) from Elephant Capital for picking the 60% stake in the Mauritius JV. The loan was to be repaid with annual interest of 9% in two years.

Although Krammer, the Singapore entity through which Makkar owns the 60% in Elephant Capital 1, paid the interest last year in June, it failed to pay either the interest or the principal sum due on June 28, 2009.

Elephant Capital, which is led by Dabur group’s Gaurav Burman, had been negotiating with Krammer for restructuring the loan but it has failed to move forward.

As a result, Elephant Capital is now taking full ownership of the shareholding of the Mauritius JV. Elephant Capital’s loan to Krammer was secured through the shares in the JV. The current worth of these shares through its indirect holding in Mahindra Forgings is around Rs 13 crore. The outstanding amount on the loan advanced to Krammer is over £4 million (Rs 31 crore including unpaid interest).