Edelweiss sets up advisory board for stressed assets revival


New Delhi: Financial services firm Edelweiss Group has set up an advisory board for revival of stressed and distressed companies, it said in a statement on Wednesday.

The board comprises Sushil Kumar Roongta, a former chairman of Steel Authority of India Ltd; T. Sankaralingam, a former chairman and managing director of NTPC Ltd; and Mahinder Singh Mehta, a former chief executive officer of Reliance Infrastructure and Vedanta Resources.

“Their deep expertise, thought leadership and specialist technical advice will be invaluable for Edelweiss’s turnaround business and investment teams,” Rashesh Shah, chairman and CEO of Edelweiss Group, said.

The advisory board will work closely with Edelweiss’s Distressed Assets Resolution Business and will also counsel and mentor Edelweiss’s operating teams in implementing best practices in portfolio companies across areas including operations, corporate governance, environmental and social responsibility, human resources and risk management.

The group claims that it has identified large assets in diverse sectors including power, steel, infrastructure and logistics for operational turnround that may entail, in specific cases, a change in management.

“The focus of these turnarounds will be on enhancement of operating efficiencies, higher asset and capacity utilization and better working capital management with the twin objectives of improving profitability and cash flows of such companies,” it said in the statement.

Edelweiss started its stressed and distressed assets resolution business as one of its core businesses around 30 months ago.

The business is carried out through its special situation funds and Edelweiss Asset Reconstruction Co. (EARC).

Edelweiss’s Distressed Assets Resolution Business, through its asset reconstruction arm EARC, currently manages about 550 portfolio companies, with assets under management totaling nearly Rs32,000 crore.

Edelweiss Asset Reconstruction has been one of the most active ARCs in recent times.

In October, Edelweiss joined hands with Caisse de Dépôt et Placement du Québec (CDPQ), the second-largest pension fund in Canada, for a long-term partnership to invest approximately Rs5,000 crore in stressed assets and specialized corporate credit in India, over the next four years.

According to the pact, the Canadian pension fund agreed to make annual investments of Rs1,250 crore in stressed assets and specialized corporate credit, totalling to around Rs5,000 crore over the next four years.

This will make it the single largest investment by an institutional investor in this sector.