Srei Equipment Finance May Get $250-Million In PE Funding

Srei Equipment Finance Ltd. said it has received expressions of interest from two international private equity firms for a $250 million capital infusion: U.S.-based Arena Investors LLP and Singapore’s Makara Capital Partners. The company’s strategic coordination commi

BY Realty Plus
Published - Saturday, 10 Apr, 2021

Srei Equipment Finance May Get $250-Million In PE Funding

Srei Equipment Finance Ltd. said it has received expressions of interest from two international private equity firms for a $250 million capital infusion: U.S.-based Arena Investors LLP and Singapore’s Makara Capital Partners. The company’s strategic coordination committee will be in discussion with potential investors, while global consultancy firm EY will advise committee, the Kolkata-based firm said. The capital infusion will provide cushion against the pandemic induced stress in the Indian financial services space. Arena Investors is an investment firm with $2.2 billion of committed capital. It also participates in special situations as part of its investment strategy. Makara Capital Partners, founded in 2005, specialises in fund management, private equity as well as structuring and financing with a core focus on innovation, infrastructure and energy. The proposal to infuse funds comes at a time when lenders led by UCO Bank are discussing a potential resolution plan, to combat the stress in SREI Group’s lending arms. The two lending businesses—Srei Infrastructure Finance Ltd and Srei Equipment Finance—have faced considerable stress over the last one year as their borrowers have been unable to repay their dues. This led to a scheme of arrangement that the group filed with its lenders, where nearly 75% of the bank debt to Srei Equipment Finance will be converted into non-convertible debentures. The banks are yet to approve the scheme. The banks are mulling options to realign their debt repayment schedule in SREI Group’s lending businesses, which included an option to change ownership of the firms. A definitive plan is yet to emerge. This week, Brickwork Ratings had downgraded perpetual debt instruments issued by Srei Infrastructure Finance to default grade from BBB- before. The action by Brickwork follows similar downgrades by CARE Ratings and Acuite Ratings & Research last month.