Goldman, Varde Lead $922 Million RattanIndia Power Debt Recast
The transaction is one of the largest restructuring deals outside the nation’s bankruptcy court.
(Bloomberg) -- A consortium led by Goldman Sachs Group Inc. and Varde Partners LP will buy 65.75 billion rupees ($922 million) of debt from an Indian power company at a 38% discount, in one of the largest restructuring deals outside the nation’s bankruptcy court.
Creditors of RattanIndia Power Ltd. will sell the debt via an asset reconstruction company controlled by the Aditya Birla Group, RattanIndia said in a filing late Monday. Creditors include State Bank of India and Power Finance Corp.
The deal is one of the biggest under revised rules issued by the Reserve Bank of India in June, after the Supreme Court barred it from pushing defaulting companies into bankruptcy court and removing their management. The power sector accounts for a significant portion of India’s $130 billion bad-loan pile.
RattanIndia shares rose 2.7% as of 9:39 a.m. in Mumbai on Tuesday, compared with a 0.2% fall in the main equity gauge. The BSE Power index gained 0.2%.
The recast could boost efforts to revive its failing power companies as they grapple with excess capacity and financially strained customers. The biggest drop in India’s electricity demand in at least 12 years is hindering attempts by lenders to recover a pile of loans to power producers.
To contact the reporter on this story: Bijou George in Mumbai at bgeorge66@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Jeanette Rodrigues, Tuhin Kar
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