This will help the stainless steel producer come out of the corporate debt restructuring (CDR) process as it will aid in repaying its loans and debt obligations to banks, said Kotak Investment Advisors in its release.
Kotak Special Situations Fund is a $1 billion fund with a mandate to invest in special situations in India.
Under the transaction, KSSF has purchased equity shares from lenders of Jindal Stainless and invested in debentures of the company to repay the OCRPS (Optionally Convertible Redeemable Preference Shares) and recompense due to lenders as part of the CDR package.
Post completion of the transaction, KSSF will hold approximately five per cent equity in Jindal Stainless Limited.
“We are delighted to partner with Jindal Stainless Limited by taking a five per cent equity stake in the company and providing financing facility to help Jindal Stainless come out of CDR,” the release quoted Eshwar Karra, chief executive officer- Kotak Special Situations Fund at Kotak Investment Advisors Ltd as saying.
“Our investment in Jindal Stainless Limited is in line with our objective of participating across the credit lifecycle of a company by providing unique solutions to the financing gaps seen in the industry. Coming out of the CDR process, JSL can now chart out its growth and debottlenecking plans by approaching the financial markets on competitive terms,” added Karra.
Meanwhile, officials of Jindal Stainless were unavailable for comments.
With debt equity ratio at 1:5 as on March 31, 2019, Jindal Stainless currently carries net debt of Rs 3,645 crore. While the debt levels have dropped from nearly Rs 12,000 crore in FY14, the cash & cash equivalent has remained lean over the years and stood at meager Rs 47.5 crore in FY19.