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Kotak Special Fund readies for ₹700-cr deal

The various funding arm of Kotak Investment Advisors Ltd will deploy half its $1 billion fund because it prepares to seal its eighth deal, first for a highway asset, value about 700 crore ($101.5 million).

Kotak Special Situations Fund pays lenders to take a majority stake in confused HKR Roadways Ltd, an individual with information of the matter stated.

The Telangana-based particular goal car is owned by publicly listed Gayatri Highways Ltd, DLF and associates, and Megha Engineering and Infrastructure Ltd.

In addition to the Kotak fund, HKR Roadways may also pay lenders 50 crore, the particular person stated. The deal is a part of a one-time settlement of round 750 crore (revised from 800 crore final year) proposed by promoters to HKR Roadways’ seven lenders led by Canara Bank, the particular person added.

The different lenders are Punjab National Bank, Union Bank of India, Indian Overseas Bank, India Infrastructure Finance Company, Indian Bank and Bank of Baroda.

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The complete payout of 750 crore means a haircut of fifty% for the lenders, the particular person cited above, stated. Outside of the deal, the Kotak fund could make investments funds in HKR Roadways for capex and upkeep.

“The deal was expected to be completed by March but got delayed due to issues relating to land acquisition and a bridge around the road. It should be closed within the next week or two,” stated the particular person.

The funding may see a turnaround inside two to a few years. After the deal, Gayatri Highways will maintain 26% of HKR Roadways, the supply stated.

Last week, the agency stated it will purchase about 49% stake within the highway asset to facilitate the “conversion of debt into cumulative redeemable preference shares as per the terms of funding by the Kotak fund”.

The fund, launched in February 2019, obtained $500 million from Abu Dhabi Investment Authority. It hit its ultimate shut in August 2019 at $1 billion ( 7,130 crore).

The fund focuses on particular conditions, credit score and distressed areas in India. In January 2020, it struck its debut deal.

In March 2021, the fund closed two offers by investing in fee options supplier AGS Transact Technologies and speciality chemical substances agency DCW.

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