Dynamatic Technologies to rationalise debt structure

May tap PE giant KKR for $50-million debt

Bangalore-based Dynamatic Technologies, which designs and builds highly engineered products for aerospace and automotive sectors, among others, is looking at restructuring its Rs 600-crore debt.

Dynamatic, whose top line was a little over Rs 1,600 crore in FY12, has relationships with a clutch of 15 financial institutions. Through debt revamp, the company plans to bring this down to four to five financial institutions, says an investment banker familiar with the developments.

“The company has in the recent past expanded rapidly through the inorganic route, and it has borrowed from (many) financial institutions,” said the banker. He indicated that the company is in talks with global private equity giant KKR (Kohlberg Kravis & Roberts), which has an active non-bank financial company (NBFC) in India.

According to some other industry sources, Dynamatic has mandated IDFC Capital for the revamp of its debt and the exercise is expected to be wrapped by end-December 2012. While Dynamatic Technologies executives confirmed that they have started the exercise to rationalise the debt structure, they declined to disclose the institutions with whom discussions are being held, saying the talks are in early stages.

Two other bankers, privy to the developments, told Business Standard that Dynamatic prefers financial institutions to which it doesn’t already have any exposure. “It is all about bringing in a good rate of interest and good value,” said the bankers.

They indicated KKR might be looking at forking out a debt of about $50 million to Dynamatic Technologies.

When asked, KKR declined to comment.

KKR, which manages about $60 billion in assents under management (AUM) globally, has an active arm in India, KKR India Financial Services.

According to industry observers, PE funds are shoring their debt arms as they feel it will help them make inroads into Indian companies which may be averse to offloading equity before understanding a PE player.