Bulge-bracket private equity funds TPG Capital Management and KKR & Co LP are competing with domestic textile companies Vardhman Group, Trident and a brand new special situations joint venture between Ajay Piramal Group and Brescon to take control of debt-ridden Alok Industries, one of India’s largest exporters of home textiles. A joint forum of 25 banks led by State Bank of India that together have an exposure of around Rs 13,000 crore in the company, decided in January to convert loans extended to Alok Industriesinto a 65% equity stake by invoking the strategic debt restructuring (SDR) option. SBI Capital Markets has since been mandated to run a formal auction process to sell the core businesses as a whole or in parts, multiple sources told ET. The banks had called an extraordinary general meeting of the company on Monday to decide on their strategy. The potential suitors are believed to be more keen on individual assets than aking control of the listed Alok Industries. Some have expressed their discomfort about governance quality, given that the company’s statutory auditor Delloitte Haskins & Sells LLP quit last November within five months of coming on board. Some bankers have been contemplating an alternative plan to split the business into cotton and non-cotton units and sell the latter KKR, TPG and Piramal Group declined to comment.
Source: Economic TimesPrivate equity funds, textile companies vie for debt-ridden Alok Industries.
Industry: Textile 2016-03-16
