Edelweiss bails out Unitech Machines with Rs 380-cr loan
Mumbai: Setting an example on how to avoid a default and avoid the pain of loan restructuring, Edelweiss India Special Situation Fund is bailing out Unitech Machines, an auto component maker, with a Rs 380 crore loan, which would be converted into equity. Edelweiss' funds would be used to repay loans of Yes Bank and ICICI Bank among others with the fund without which it would have defaulted. Edelweiss will get an equity stake at a later stage for the funds which it plans to encash at a premium when the company floats its shares.
Unitech Machines is India's third largest two-wheeler lighting solutions provider and a primary vendor to Hero MotoCorp.Edelweiss India Special Situation Fund is focused on turnaround of stressed assets. It has a corpus of . 11,000 crore.` “Post ` . 380 crore investment by Edelweiss India Special Situation Fund, we are confident of build ing well diversified auto sector-focussed business catering to Hero, Yamaha, Toyota and Maruti, which can potentially be listed in future,“ said Suman Punn, CFO, Unitech Machines.
Rs 330 crore will be As per the deal, used to repay loans of banks and other creditors and the balance will be used as working capital.
The investment by the fund in the Gurgoan-based company is in form of seven-year bond with an option to convert these bonds in to equity after three years.
“Unitech Machines' investment is in line with the fund's strategy to back financial turnaround of mid to large size corporates with proven management and operat ing track record in target sectors witnessing robust demand like auto, cement and paper,“ said Ra vi Agarwal, head at Edelweiss Special Situations Fund.
A bank executive said Unitech Machine would have defaulted in the quarter to March, adding to the stress on Indian banks, if Edelweiss had not extended the loan. The company will repay debt of all six lenders and Edelweiss will be the sole lender to the company.
“We are bullish on medium to long-term prospects of the auto sector,“ said Siby Antony, CEO at Edelweiss ARC.
Unitech Machines is India's third largest two-wheeler lighting solutions provider and a primary vendor to Hero MotoCorp.Edelweiss India Special Situation Fund is focused on turnaround of stressed assets. It has a corpus of . 11,000 crore.` “Post ` . 380 crore investment by Edelweiss India Special Situation Fund, we are confident of build ing well diversified auto sector-focussed business catering to Hero, Yamaha, Toyota and Maruti, which can potentially be listed in future,“ said Suman Punn, CFO, Unitech Machines.
Rs 330 crore will be As per the deal, used to repay loans of banks and other creditors and the balance will be used as working capital.
The investment by the fund in the Gurgoan-based company is in form of seven-year bond with an option to convert these bonds in to equity after three years.
“Unitech Machines' investment is in line with the fund's strategy to back financial turnaround of mid to large size corporates with proven management and operat ing track record in target sectors witnessing robust demand like auto, cement and paper,“ said Ra vi Agarwal, head at Edelweiss Special Situations Fund.
A bank executive said Unitech Machine would have defaulted in the quarter to March, adding to the stress on Indian banks, if Edelweiss had not extended the loan. The company will repay debt of all six lenders and Edelweiss will be the sole lender to the company.
“We are bullish on medium to long-term prospects of the auto sector,“ said Siby Antony, CEO at Edelweiss ARC.
