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Piramal-Bain stressed assets unit, AION Capital eye Alok Industries stake

LiveMint logoLiveMint 21-08-2017 Kavya Kothiyal

Debt-laden textile maker Alok Industries Ltd, which is currently in bankruptcy court, has caught the eye of financial investors.

A distressed asset investment platform by Piramal Enterprises Ltd and private equity fund Bain Capital Credit and India-focused special situations fund AION Capital Partners Ltd, have shown interest in buying a stake in Alok Industries, two people aware of the development said.

“The cases referred to the National Company Law Tribunal (NCLT) have been witnessing strong interest from financial investors. The likes of AION and Piramal-Bain are some of the few active investors focusing on this space and Alok Industries is one asset that’s on the radar of these funds,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.

AION Capital and Piramal Enterprises declined to comment to emailed queries while Alok Industries said neither of the two entities has approached it for investments.

Billionaire Ajay Piramal-led Piramal Enterprises had launched a $1 billion distressed asset investment platform with private equity fund Bain Capital Credit in 2016. Bain capital has been actively investing in stressed assets across the globe, including Asia.

AION is an India-focused fund established by Apollo Global Management Llc. together with ICICI Venture Funds Management Co. Ltd, with around $825 million in committed capital.

State Bank of India, one of the lenders to Alok Industries, had moved an insolvency petition before NCLT on 29 June. On 18 July, the tribunal admitted proceedings against Alok Industries, which owes about Rs23,000 crore to lenders and trade vendors.

The Ahmedabad bench of NCLT has appointed an interim resolution professional to start insolvency proceedings. The process is expected to continue till January. Alok Industries is one of the 12 large defaulters named by the Reserve Bank of India (RBI) for reference to NCLT.

In June, RBI named 12 large defaulters and asked banks to initiate insolvency proceedings against them under the insolvency and bankruptcy code. These 12 companies account for almost a quarter of the bad loans in the banking system and include names such as Monnet Ispat and Energy Ltd, Amtek Auto Ltd and Essar Steel Ltd.

Several of these firms have seen interest from potential buyers. On 7 August, Mint reported that debt-laden Bhushan Steel Ltd has caught the attention of from several financial investors including Piramal-Bain, AION Capital, Oaktree Capital and Lone Star Funds. Asia-focused special situations fund SSG Capital Management too has shown interest in the firm, Mint reported earlier.

ABG Shipyard Ltd has seen interest from Liberty House Group, the UK-based global metals and engineering firm controlled by billionaire Sanjeev Gupta. Liberty House Group is also interested in the Indian assets of Amtek Auto, Gupta told Mint in July.

The Piramal-Bain platform has been scouting sectors for opportunities in the distressed assets space.

In May, Mint reported that the platform plans to acquire KSK Energy Ventures Ltd’s partially commissioned 3,600 megawatts (MW) power plant in Chhattisgarh.

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