Srei Infrastructure Finance hit an upper circuit of 20% at Rs 7.02 after the company said its subsidiary, Srei Equipment Finance, received expression of interest for up to $250 million capital infusion from international private equity funds.Srei Equipment Finance (SEFL) has received expression of interest (EoI) for up to $250 million capital infusion in the company from US based international private equity (PE) fund Arena Investors and Singapore's Makara Capital Partners.
SEFL said that its 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. Meanwhile, Ernst & Young will also be advising the committee on the proposed fund-raising exercise.
SCC is running an independent process for investor identification and has received expression of interest from Arena Investors and Makara Capital Partners. This process is 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 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.
Arena Investors is a multi-strategy investment firm with $2.2 billion of committed capital. The firm's investment mandate is global, and also unconstrained in terms of asset class and industry. It provides creative solutions for those seeking capital in special situations.
Makara Capital Partners is a global financial services company under the regulatory purview of the Monetary Authority of Singapore. Founded in 2005, Makara Capital specializes in fund management, private equity as well as structuring and financing with a core focus on innovation, infrastructure and energy.
SEFL, a wholly-owned subsidiary of Srei Infrastructure Finance (Srei), is an industry leader in construction and mining equipment financing.
Srei has a presence majorly in the financing of the infrastructure sector and construction and mining equipment (CME), besides the financing of IT, medical and farm equipment and loans against property (LAP).
On a consolidated basis, Srei posted a net loss of Rs 3810 crore in Q3 FY21 as compared to a net profit of Rs 60 crore in Q3 FY20. Total income tumbled nearly 66% to Rs 484.35 crore in Q3 FY21 over Q3 FY20. The company's provisions spiked to Rs 2832 crore in Q3 FY21 from Rs 26.19 crore in Q3 FY20.
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