Jagatjit Industries Ltd has raised structured debt funding of Rs 265 crore ($41.6 million) from non-banking financial company Indiabulls Commercial Credit Ltd.
The funds will be used to retire the debt previously raised from private equity giant KKR's lending arm and public sector lender Union Bank of India and will help the company address working capital needs, the firm said in a statement.
“Despite the infusion, the total company debt remains unchanged from last year but we have significantly reduced the interest burden.
The second leg of this deal will further reduce the interest burden releasing more money for working capital,” said Roshini Sanah Jaiswal, promoter and chief restructuring officer at Jagatjit Industries.
“We are also looking at monetising unutilised assets to be debt free in the next few years,” she said.
Jagatjit Industries had raised an unsecured debt worth Rs 110 crore from KKR India Financial Services Pvt. Ltd, according to its annual report.
“We have had a very good relationship with the Jagatjit team and see they are working hard to turn around the company. They repaid the full loan before it was due,” said Tashwinder Singh, managing director of KKR Capital Markets India.
Founded in 1944, Jagatjit Industries produces Indian made foreign liquor and country liquor. Aristocrat is its flagship brand. It also manufactures malt extract and malt milk food. Besides, the firm earns rental income from surplus properties in Delhi and Gurgaon.
As on 31 March 2017, the company’s total debt stood at around Rs 300 crore, according to its annual report.
The firm posted consolidated net sales of Rs 510.95 crore and a net loss of Rs 120.58 crore in the year through 31 March 2017.
Caparo Financial Solutions, the financial services arm of the UK-based Caparo group, advised Jagatjit Industries on this transaction.