Srei Eqpt Finance gets $250 mn equity infusion offer from global PE funds

Company panel to negotiate and conclude talks with the PE investors; Ernst & Young will be advising on the proposed fund raising exercise

Srei Equipment Finance Limited (SEFL) said on Thursday that it has received expression of interest for up to $250 million capital infusion in the company from international private equity (PE) funds, US-based Arena Investors LP and Singapore's Makara Capital Partners.

The company's Strategic Coordination Committee (SCC), chaired by Malay Mukherjee, independent director, will coordinate, negotiate and conclude discussions with the PE investors to bring the capital into the business and advise the management, the company said. Ernst & Young (E&Y) will be advising the committee on the proposed fund raising exercise.

Arena Investors LP is a multi-strategy investment firm with $2.2 billion of committed capital while Makara Capital Partners is a global financial services company specialising in fund management, private equity as well as structuring and financing with a core focus on innovation, infrastructure and energy.

The SCC is running an independent process for investor identification and has got expressions of interest from Arena Investors LP and Makara Capital Partners, SEFL said. The process was being carried out in parallel to the debt realignment plan.

The SCC will engage in discussions with the potential investors to raise fresh capital for the business, which will provide cushion against the pandemic induced stress in the Indian financial services space, the company further said.

Srei had been under stress in the wake of Covid, which had led to an asset-liability mismatch. In the third quarter, Srei Infrastructure had reported a consolidated net loss of Rs 3,810.93 crore on account of higher and accelerated provisioning, which came on the back of a special audit conducted by the Reserve Bank of India (RBI) into the company and SEFL.

The company has also seen about 200 exits across various levels since December last year as banks capped salaries at Rs 50 lakh a year for senior executives.

The SCC will also be the nodal point for a comprehensive cash flow realignment plan with banks and financial institutions and for all external service providers, including investment bankers, lawyers and consultants, said SEFL