Buyout major Kohlberg Kravis Roberts & Co Ltd (KKR), which closed a $2 billion Special Situations Fund to invest in distressed assets across the globe, is keen to invest in stressed companies in India which are struggling with capital issues and raising debt, according to one of its co-founders.
“A lot of mid-sized and smaller companies today have found that they can’t get capital…We can provide some capital to help them out,” Henry Kravis, co-founder of the PE giant who is in India, said on Thursday.
He added that KKR may also consider taking a pool of non-performing loans from Indian banks.
His comments come at a time when the RBI has recently allowed PE firms to participate in leveraged buyouts for snapping stressed assets in India. Leveraged buyout transactions, where acquirers borrow from banks to acquire, are a common mode of acquisition by buyout firms in the developed markets but have been a non-starter in India as extant norms did not allow banks to lend for such deals.
Kravis, one of the global heavyweights in the PE world, opined that it is really tough to acquire controlling stake in companies in emerging markets, and particularly hard in India given the prevalent family-owned business structure.
KKR started its India investment with a buyout of Flextronics (later renamed Aricent) in 2006 and last year snapped Alliance Tire. In between it has been actively doing growth capital deals as well as structured finance transactions.
KKR does not have an India dedicated PE fund but has a specialised NBFC in the country for debt styled financing.
Last year, the company had raised $6 billion for the biggest ever Asia-focused fund.
More recently, in January, it made final close of KKR Special Situations Fund LP, a $2 billion global fund focused primarily on distressed and event-driven investments. It closed at two times its original target of $1 billion.
Launched in 2010, KKR’s Special Situations platform is part of KKR’s $20.9 billion credit business, which is expected to grow to approximately $29 billion with close of the announced acquisition of Avoca Capital.
(Edited by Joby Puthuparampil Johnson)