Srei Equipment Finance gets funding interest from two global funds

Srei Equipment Finance was granted a six-month repayment moratorium by the Kolkata bench of NCLT till 30 JunePremium
Srei Equipment Finance was granted a six-month repayment moratorium by the Kolkata bench of NCLT till 30 June
 2 min read . Updated: 08 Apr 2021, 07:27 PM IST Shayan Ghosh

These are US-based Arena Investors LP and Singapore's Makara Capital Partners, the company said in a statement

Kolkata-based non-bank lender Srei Equipment Finance Ltd on Thursday said it has received expressions of interest for capital infusion of up to $250 million from two global private equity (PE) funds.

These are US-based Arena Investors LP and Singapore's Makara Capital Partners, the company said in a statement.

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“The company's strategic coordination committee (SCC), chaired by Malay Mukherjee, independent director, will coordinate, negotiate and conclude discussions with the PE investors to bring the capital into the business and advise the management. Ernst & Young (E&Y) will be advising the committee on the proposed fund-raising exercise," it said.

The statement said that Arena Investors LP is a multi-strategy investment firm with $2.2 billion of committed capital and the firm's investment mandate is “unconstrained" in terms of asset class and industry. On the other hand, Makara Capital Partners is under the regulatory purview of the Monetary Authority of Singapore and was founded in 2005, it said. Makara Capital, Srei said, specialises in fund management, private equity as well as structuring and financing with a core focus on innovation, infrastructure and energy.

“The SCC will engage in discussions with the potential investors to raise fresh capital for the business, which will provide cushion against the pandemic induced stress in the Indian financial services space," the statement added.

The SCC, Srei said, will also be the nodal point for a comprehensive cash flow realignment plan with banks and financial institutions and for all external service providers, including investment bankers, lawyers and consultants.

Srei Equipment Finance was granted a six-month repayment moratorium by the Kolkata bench of the National Company Law Tribunal (NCLT) till 30 June. Parts of that order has, however, been challenged by multiple institutions including the Reserve Bank of India (RBI) and a few rating agencies. In fact, the National Company Law Appellate Tribunal (NCLAT) has ordered an interim stay on a specific section of the Kolkata NCLT order that had restricted any action by the RBI against the Srei group.

Brickwork Ratings and several others had separately moved NCLAT against the NCLT order. CARE Ratings has downgraded Srei’s ratings for ₹29,240.3 crore debt to “default", after this favourable NCLAT order in a separate case it filed along with others.

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Meanwhile, debenture trustees Axis Trustee Services Ltd and Catalyst Trusteeship Ltd, which represent bondholders, have also jointly moved the tribunal against the order.

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