Asset Reconstruction Company of India Ltd. (Arcil) has acquired 26% equity in NSSL Pvt. Ltd., an unlisted subsidiary of
Group, as a part of its broader strategy to revive the distressed company outside of the Insolvency and Bankruptcy Code, people aware of the development said.
Avenue Capital-backed Arcil has also provided Rs 90-95 crore as debt facility for three years against a personal guarantee by the promoters to NSSL and pledging of their shares.
Over the last two years, the ARC acquired debt facilities from
and Sicom Ltd. at a discount of 55-60%, one of the persons cited earlier said.
According to a rating report by Brickworks, the company had fund-based and non-fund-based facilities of Rs 249 crore as of March 2020.
The debt facility provided by Arcil, which mainly includes term loans with bullet payment, is priced at 18-20% per annum and would be payable by the middle of 2024, the person said.
Arcil and NSSL did not respond to requests for comment.
Nagpur-based NSSL has four key divisions–ferrous valves, brass valves, automotive machining and aluminum foundry–according to the company’s website.
The parent company is one of the consumers of NSSL’s products, according to the annual report of Jayaswal Neco.
Ares SSG Capital-backed asset reconstruction company Assets Care & Reconstruction Enterprise Ltd (ACRE), in partnership with Bank of America, had entered into an out-of-court resolution with the promoters of steelmaker Jayaswal Neco.
Acre acquired 32% equity of Jayaswal Neco, soon after purchasing loans, jointly with Bank of America, from all the lenders at a discount of nearly 30%. The company has principal dues of Rs 3,638 crore, according to its annual report for FY21.
The ARC’s debt acquisition was backed by global distressed funds such as Davidson Kempner Capital Management, Oaktree Capital and Ares SSG, according to media reports.
Jayaswal Neco was among the 28 companies referred by the Reserve Bank of India (RBI) to be taken up under IBC in 2017. However, due to a series of litigations and simultaneously selling of loans by lenders to the ARC, it did not get admitted by NCLT and an out-of-court resolution was implemented.