Other Deals
Edelweiss ARC sells Karaikal Port debt, 11% stake to Omkara Assets for Rs.1,500-Cr
Edelweiss Asset Reconstruction Co Ltd (EARC) has sold debt of INR 2,059.24 crore, along with the 11% equity it held in Karaikal Port Pvt Ltd, to Omkara Assets Reconstruction Pvt Ltd for INR 1,500 crore, setting the stage for corporates such as Adani Ports to acquire the port located in Puducherry. The deal translates into a haircut of about 27% for the lenders. Edelweiss ARC ran a ‘Swiss Challenge' to sell the debt that was originally assigned to it by nine lenders of the port operating company - Indian Overseas Bank, Indian Bank, Punjab National Bank, Oriental Bank of Commerce, United Bank of India, Central Bank of India, Syndicate Bank, Allahabad Bank and India Infrastructure Finance Company Ltd. The Swiss Challenge auction failed to receive any counter bids when the deadline ended on October 14. GRK Reddy, the promoter of Marg Ltd, which operates the port, had challenged the Swiss Challenge process first in the Madras High Court and then in the Supreme Court. The Supreme Court permitted Reddy to file a review petition in the Madras High Court against the earlier order, which he did but lost. Edelweiss ARC has come under pressure to sell the debt as the restructuring of the loan assigned by the original lenders to the ARC has to be completed within 8 years, which ends in July 2023. Marg holds a 45% stake in Karaikal Port while Ascent Capital, Jacob Ballas Capital, Affirma Capital and GIP together hold a 44% stake. Karaikal Port runs the all-weather port developed on a Build, Operate and Transfer (BOT) format under the public private partnership (PPP) mode on a 30-year concession awarded by the Puducherry government. The port started operations in June 2009.
From the Venture Intelligence PE-VC Deal Database: Between Mar-10 and Jun-12, Karaikal Port had raised nearly $140-M from StanChart PE, NYLIM Jacob Ballas Funds, Ascent Capital and IDFC PE (which made a partial exit later). (Subscribers to the database can login to view the valuation, deal structuring and other transaction details.)
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