SBI sells  exposure in Indian Steel Corp to Bain-Piramal ARC

Photo: Reuters

State Bank of India (SBI) has offloaded its 929-crore exposure in Indian Steel Corp. Ltd to India Resurgence ARC, a 50:50 joint venture between Piramal Enterprises Ltd and Bain Capital Credit, to recover 362 crore in cash.

The public sector lender took a 61% haircut on the asset, a person aware of the development said, requesting anonymity.

The asset reconstruction company (ARC) is also in discussions to buy out the loans of Punjab National Bank, Corporation Bank, and IDBI in Indian Steel Corp., which had been incorporated in 2002 by the Ruchi Group of Industries and Mitsui and Co.

“A JV between Piramal Enterprises Ltd and Bain Capital Credit, confirms acquisition of all of State Bank of India’s debt exposure in Indian Steel Corp. Ltd, a company which we believe, with restructuring, would have strong growth prospects linked to India’s infrastructure and consumption needs,” an India Resurgence spokesperson said an emailed response to Mint’s queries.

The company has a manufacturing facility at Bhimasar, near the Kandla port in Gujarat.

India Steel Corp. had reported net losses of 84 crore in FY18 on an operating income of 1,245 crore, compared to net losses of 198 crore and operating income of 1,533 crore in FY17, according to the most recent credit rating report by Icra, dated August 2018.

Icra had rated the company’s loan instruments D, or default, for more than three years.

India Resurgence Fund was launched in 2016 to invest in special situations and distressed assets across sectors, barring real estate.

The fund looks “to invest in businesses that require balance sheet restructuring with a focus on debt restructuring” and fund companies with “strong growth prospects linked to India’s infrastructure and consumption needs”, according to its website.

Last November, the fund had invested $156 million via debt and equity instruments, in the marine chemicals business of the Chennai-based Archean Group.

Mint had reported in February that SBI had decided to sell 487 bad loan accounts worth more than 1,000 crore in corporate, small and medium enterprise, and housing segments to ARCs, other banks and financial institutions on a full-cash basis to recover debt quickly and side-step the complicated bankruptcy process.

This article was first published on livemint.com

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.