Shapoorji Pallonji, SSG Capital plan joint bid for Jyoti Structures acquisition
Mumbai: Diversified conglomerate Shapoorji Pallonji group and Asia-focused distressed assets investor SSG Capital will jointly bid for power transmission tower maker Jyoti Structures Ltd, which is currently facing bankruptcy proceedings, two people aware of the development said.
Sterling and Wilson Pvt. Ltd (SWPL), a unit of Shapoorji Pallonji, will bid jointly with SSG Capital for a controlling stake in Jyoti Structures, the people cited above said on condition of anonymity. Sterling and Wilson is an engineering, procurement and construction (EPC) company engaged in mechanical, electrical and solar industries.
“The deadline for submitting EoIs (expressions of interest) will end on 12 September and the final bidding process will be completed in next two months,” said one of the two persons cited above.
In June, Jyoti Structures was among the 12 defaulters named by the Reserve Bank of India (RBI) for immediate bankruptcy proceedings. The National Company Law Tribunal (NCLT) has appointed an interim resolution professional (IRP) from BDO India to administer the company and prepare a resolution plan. In August, the insolvency professional invited expressions of interest from potential buyers for the stake.
KEC International Ltd, part of the RPG group, and Kalpataru Power Transmission Ltd (KPTL) are also expected to bid for Jyoti Structures, the second of the two persons cited above said. “Representatives from KEC International and KPTL have recently met the IRP to discuss a potential bid,” this person said. Mint had reported in July that banks have held talks with potential buyers such as Kalpataru Power Transmission Ltd, Essel Infrastructure, Simplex Infrastructures Ltd, KEC International Ltd and Transrail Lighting Ltd to sell a 51% stake in Jyoti Structures.
The lenders had invoked the Reserve Bank of India (RBI)’s strategic debt restructuring (SDR) norms in 2015 but later restructured its debt outside the provisions of SDR. Mint had reported in July that State Bank of India New York (SBI New York), a subsidiary of the nation’s largest lender, has sold its entire loan exposure in the US unit of Jyoti Structures Ltd for an undisclosed sum to Falcon Steel America, a US-based maker of power transmission towers.
While emails sent to Shapoorji Pallonji group and SSG Capital remained unanswered till press time, Vimal Kejriwal, managing director and chief executive of KEC International said “as a policy, we do not comment or respond to market speculation or rumour”.
According to industry estimates, deal making in distressed assets space this fiscal is likely to be close to $80 billion as more defaulting companies are taken to bankruptcy proceedings by lenders under the new insolvency and bankruptcy code, where a resolution plan must be approved within 180 days, with a 90-day extension allowed, failing which the company will move into liquidation.
India’s distressed companies have seen growing interest from domestic and foreign funds as well as strategic buyers. Mint reported in July that SSG Capital Management, founded in 2009 by former Lehman Brothers executives Edwin Wong, Andreas Vourloumis and Shyam Maheshwari, is raising close to $2 billion across two Asia-focused new funds to invest in distressed assets in China, India and South-East Asia.
The Shapoorji Pallonji group has also been actively looking at opportunities in the distressed space.
The group was in talks with lenders of Karaikal Port Ltd in Puducherry to buy a controlling stake; the deal, however, did not materialize. In January, the group acquired a controlling stake in Odisha’s Gopalpur Port Ltd (GPL) for a close to Rs700 crore, in a deal facilitated by the lenders of GPL.