SREI Equipment Finance Receives Interest From Cerberus Global
Kolkata-based SREI Equipment Finance Ltd has received an expression of interest from a third global investor, its parent informed stock exchanges on Saturday. SREI Infrastructure Finance Ltd, the holding company of SREI Equipment Finance, said that Cerberus Global Investments has submitted an expression of interest for capital infusion in the company.
Cerberus Global Investments is part of the US-headquartered Cerberus Capital Management, a global private equity fund specialising in distressed debt situations.
Earlier this month, the company had disclosed that two international private equity funds — Arena Investors LP and Makara Capital Partners had submitted their expressions of interest for a $250 million investment in SREI Equipment Finance.
A strategic coordination committee headed by the company’s Independent Director, Malay Mukherjee is negotiating terms with the investors, to finalise an investment proposal. Global consulting firm EY is advising the committee on the fund raising process.
The fund infusion is crucial for the Kolkata-based company to continue operations and seek approval from lenders for a long discussed restructuring plan. SREI Equipment Finance and SREI Infrastructure Finance have been unable to repay their creditors on account of business disruptions during the Covid-19 pandemic. The pandemic had led to the borrowers of the SREI group companies being unable to repay them, which in turn, affected the companies’ ability to repay its own debt.
As on Sept. 30, 2020, consolidated borrowings of Srei Infrastructure stood at Rs 31,435 crore compared with Rs 33,108 crore a year ago. Bank borrowings contributed 59.49% of total borrowings, while non-convertible debentures stood at 13.27%.
In the quarter ended December, Srei Infrastructure reported a consolidated net loss of Rs 3,811 crore compared with a net profit of Rs 60 crore a year ago. Total income fell 66% year-on-year to Rs 484.35 crore in the third quarter. Expenses rose sharply as costs due to impairment of loans rose to Rs 2,833 crore compared with Rs 26 crore a year ago.