Private equity major KKR has signed an agreement with Gautam Thapar-promoted Avantha Group to invest Rs 630 crore ($100 million) in the group’s holding company as well as other businesses, as per a report in The Economic Times.
The funding raised by KKR, will be used to repay the short-term debt of Avantha Holdings, the holding company of the $4-billion diversified Avantha Group. The PE firm is also said to be infusing more capital in some group firms.
"We have been partnering with the Avantha Group consistently over the past several years, beginning from our investment in Avantha Power," said Sanjay Nayar, chief executive, KKR India. "With this investment, we now have a comprehensive partnership that spans all the key businesses of the group,” Nayar told ET."
This comes close on the heels of the group raising $150 million from AION Capital Partners, a special situations investor. The funds will be used by the group holding firm, which controls companies such as paper maker Ballarpur Industries and electrical appliances maker Crompton Greaves, to repay debt and release pledged shares of the promoters in various companies.
AION, the joint venture between Apollo Global Management—an alternative assets manager with $70 billion of AUM—and ICICI Venture—an arm of India's largest private sector lender—has roped in two of its limited partners (LPs) for the transaction which closed two months ago.
KKR has also invested in the group's power utility business Avantha Power & Infrastructure along with Faering Capital.
Avantha Group has also raised private equity funding for its other businesses, like $175 million from GIC Special Investments and JP Morgan for Ballarpur Paper Holdings B. V, a subsidiary of Ballarpur Industries Ltd. Avantha also raised $10 million for its processed food company Global Green Company from Rabo Equity Advisors.
KKR has invested through its alternative credit platform and this deal is similar to its investment in a promoter holding company of Apollo Hospitals. However, KKR will not be entitled to convert these financial securities into equity shares of the holding company or the listed companies in the case of Avantha, like it is allowed to in the hospital deal.
(Edited by Joby Puthuparampil Johnson)