The distressed assets fund of Kotak Investment Advisors announced its debut deal with a Rs 500 crore ($69 million) investment in Jindal Stainless Ltd in the form of debt and equity -- with the debt transaction involving the purchase of debentures ending the corporate debt restructuring of the Ratan Jindal-led firm.
As part of this transaction, Kotak Special Situations Fund has bought about a five per cent stake in the listed firm, a development VCCircle had exclusively reported in January.
Eshwar Karra, chief executive of Kotak Special Situations Fund, said, “We are delighted to partner with Jindal Stainless by taking a 5% stake in the company and providing financing facility to help Jindal Stainless come out of CDR (corporate debt restructuring).”
The stake has been purchased from four lenders -- State Bank of India (SBI), Punjab National Bank (PNB), IDBI Bank and Allahabad Bank.
According to stock exchange data released in January, SBI, IDBI Bank and Allahabad Bank sold their entire stakes while PNB only offloaded half its holding.
“Our investment in Jindal Stainless is in line with our objective of participating across the credit lifecycle of a company by providing unique solutions to the financing gaps seen in the industry. Coming out of the CDR process, Jindal Stainless can now chart out its growth and de-bottlenecking plans by approaching the financial markets on competitive terms," added Karra.
Kotak Special Situations Fund is a $1 billion fund with a mandate to invest in special situations in India.
Jindal Stainless had a total debt of Rs 4,216 crore ($595 million) as on March end 2019 along with working capital debt of about Rs 500 crore ($70.5 million).
That’s a long way from the debt of over Rs 8,000 crore ($1.13 billion) in 2010 when the firm entered corporate debt restructuring (CDR).