Bank of America-backed Asset Care Reconstruction Enterprise Limited (ACRE) has picked up 32 per cent stake in Jayaswal Neco Industries Limited thereby restructuring its debt worth Rs 5,661 crore.
The ARC is backed by other global distressed funds and investors like Davidson Kempner Capital Management, Oaktree Capital and Ares SSG.
The restructuring of the debt was done according to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and is one of the largest pre-insolvency restructurings. The company was in the Reserve Bank of India’s (RBI’s) second list for commencement of insolvency which was issued in December 2017.
The debt restructuring, amongst others, involved conversion of debt and allotment of 31.44 per cent equity shares of the company to the ACRE Trusts on a fully diluted basis. This would also be the first case of Competition Commission of India’s (CCI’s) clearance for acquisition of more than 25 per cent equity shares of a company by an asset reconstruction company on a pre-insolvency transaction. This will be the biggest deal in India’s stressed assets segment by
Khaitan & Co advised the company on the transaction.
For the fiscal year ending March 2021, the company reported sales of Rs 3,705 crore and a loss of Rs 558 crore.and a loss of Rs 558 crore.
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