A consortium spearheaded by Goldman Sachs Group Inc., along with the Varde Partners LP, is anticipated to buy debt worth INR 65.75 billion or 922 million US dollars from a power company based in India. The deal is done at a whopping discount of 38%, through the greatest restructuring pact that comes outside the perimeters of the national bankruptcy court.
The RattanIndia Power Ltd. creditors are expected to trade the debt through a company specializing in asset reconstruction governed under the reign of Aditya Birla Group, according to a statement by RattanIndia on Monday this week.
Given that this process has attracted some of the leading international funds in the backdrop of tight liquidity conditions, this clearly highlights the quality of the asset and the strong reputation and standing of the promoter group led by Rajiv Rattan. The transaction also reaffirms the faith of the global investment community in the Indian economy,
according to a news statement by an official.
The names of Creditors consist of Power Finance Corporation and State Bank of India. The deal till now is touted to be one of the biggest ones that are done under the refurbished rules given in June by the Reserve Bank of India. This happened following the Supreme Court’s prohibition order on defaulting companies to push into the court of bankruptcy and expurgate their private management.
Rajiv Rattan, Chairman, and Promoter of RattanIndia Power said:
We have been working closely with our lenders to find a solution. Today, therefore, is a big milestone as we have got marquee investors to join us in closing a One-Time Settlement (OTS) resolution with our lenders.
The power segment covers a considerable portion of bad loan horde worth $130 billion of India. The shares of RattanIndia grew by 2.7% at 9:39 a.m., as recorded on Tuesday in Mumbai. This was accompanied by a plunge of 0.2% in the primary equity gauge.
BSE’s Power index, on the other hand, earned 0.2%. The deal must increase efforts in order to restore its declining power of firms as they tussle with surplus capacity, financially stressed customers and other similar problems. It looks like the largest dip in electricity demand of India in the past 12 years is inhibiting the endeavors of the lenders indented to recover the lump of loans and power producers.