IL&FS Part­ners Lone Star to In­vest in Stressed In­fra As­sets

Fund will as­sist banks, PE in­vestors and as­set re­con­struc­tion cos to re­cy­cle cap­i­tal

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mum­bai: In­fra­struc­ture in­vest­ment com­pany IL&FS has joined hands with global pri­vate eq­uity firm Lone Star Funds to form a stressed as­sets fund that will buy bad loans from In­dian banks. The fund will have a cap­i­tal pool of $550 mil­lion, which could lead to as­set pur­chases of up to $2.5 bil­lion, the com­pa­nies said in a joint state­ment on Sun­day.

The fund will as­sist banks, pri­vate eq­uity in­vestors and as­set re­con­struc­tion com­pa­nies to re­cy­cle cap­i­tal, thus per­mit­ting rein­vest­ment cap­i­tal in fresh projects.

Founded in 1995, Lone Star in- vests glob­ally in op­er­at­ing com­pa­nies, real es­tate, eq­uity, credit and other fi­nan­cial as­sets. It in­vests on be­half of its part­ners, which in­clude pen­sion funds as well as foun­da­tions and en­dow­ments that sup­port med­i­cal re­search, higher ed­u­ca­tion and other phil­an­thropic causes. It has raised $70 bil­lion glob­ally so far and has closed more than 1,350 trans­ac­tions with an ag­gre­gate pur­chase price of $180 bil­lion (in­clud­ing ac­qui­si­tion fi­nanc­ing and co-inves- tors), the com­pany re­lease said.

IL&FS has built a port­fo­lio of in­fra­struc­ture projects ag­gre­gat­ing $25 bil­lion.

“Lone Star looks for­ward to col­lab­o­rat­ing with IL&FS in re­viv­ing In­dian in­fra­struc­ture as­sets and ben­e­fit­ting from IL&FS’s long track record as a suc­cess­ful de­vel­oper and man­ager of in­fra­struc­ture projects,” said Mark New­man, Pres­i­dent, Asia Pa­cific, Lone Star.

“The In­dia in­fra­struc­ture sec­tor is poised for re­vival as the evolv­ing frame­work is be­com­ing more con­ducive for re­solv­ing stressed as­sets. The col­lab­o­ra­tion with Lone Star is strate­gic and presents the po­ten­tial to at­tract size­able foreign di­rect in­vest­ment into In­dia,” said Ravi Parthasarathy, chair­man of IL&FS.

In­dian banks have been reel­ing under pres­sure of mount­ing bad loans. Some lend­ing in­sti­tu­tions have been un­able to lend new cap­i­tal due to the amount of stressed loans on their books.

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