US hedge fund Silver Point Capital will soon acquire AJR Infra Ltd.’s special purpose vehicle (SPV) Patna Highway Projects for Rs 930 crore, said two people aware of the development.
The National Company Law Tribunal (NCLT) approved the hedge fund’s resolution plan to acquire the special purpose vehicle on Tuesday. AJR Infra was earlier called Gammon Infrastructure Project.
The SPV’s resolution professional Sutanu Sinha could not be reached for comment. Silver Point could not be immediately reached for comment.
Silver Point’s Rs 930-crore offer equates to a 71% recovery for the lenders of the road project. The offer involves less than Rs 30 crore as upfront payment and staggered payment for the remaining amount, the people cited earlier said.
In March last year, the majority of creditors approved Silver Point’s resolution plan for the SPV. However, an offer from the promoters under Section 12A of IBC delayed the approval. Patna Highway Projects was admitted by the NCLT for debt resolution in January 2020.
Phoenix ARC Pvt. Ltd. holds nearly 80% of Patna Highway Projects’ debt. The debt purchased by Phoenix ARC from several banks, including Yes Bank, Federal Bank and four state-owned banks, is backed by Silver Point. The US hedge fund had invested in the securities receipts issued by the ARC, said people aware of the matter.
Patna Highway Projects was incorporated to implement a project to build a 63.17 km, four-lane dual carriageway on national highway 77, including a new bypass of 16.8km connecting NH-28 in Bihar on an annuity basis.
The SPV received a provisional completion certificate in September 2016. Since then, it has been receiving Rs 94 crore semi-annually. The concession period ends in 2025.
This is the first instance of a US hedge fund making a solo bid to acquire a distressed company under the bankruptcy route. In January 2021, the US stressed management fund CarVal Investors had acquired Uttam Galva Metallics along with sister concern Uttam Value Steels for Rs 2000 crore under the bankruptcy route in partnership with Nithya Capital and Asset Reconstruction Company of India (Arcil).