Kotak Special Situations Fund today announced its eighth deal to acquire 74% stake in stressed HKR Roadways owned by a consortium led by Gayatri Group.
The alternative investment arm of Kotak Investment Advisors Ltd bought the stake by settling up with lenders, led by government-owned Canara Bank, for Rs 715 crore (about $98 million).
Besides Canara Bank, other lenders are Punjab National Bank, Union Bank of India, Indian Overseas Bank, India Infrastructure Finance Company, Indian Bank and Bank of Baroda.
This will be the Kotak fund's first road asset deal.
Earlier this month, VCCircle had reported that, with this transaction, the $1 billion fund will have approached halfway point in deployment.
“Acquiring controlling stake in stressed assets like HKR is in line with our overall strategy of settling up with lenders in full cash and taking over such projects. HKR requires additional capex to achieve commercial operation date and we expect a turnaround in the next few years. Kotak Special Situations Fund will continue to offer full cash settlements, a much better option than non-cash options, and is fully geared to fund pre-packaged solutions under the Insolvency and Bankruptcy Code (IBC), as and when the rules are notified,” said Eshwar Karra, chief executive of Kotak Special Situations Fund.
The fund, launched in February 2019, received $500 million from Abu Dhabi Investment Authority. It hit its final close in August 2019 at $1 billion (Rs 7,130 crore).
The fund focuses on special situations, credit and distressed spaces in India. In January 2020, it struck its debut deal.
In March 2021, the fund closed two deals by investing in payment solutions provider AGS Transact Technologies and speciality chemicals firm DCW.
Its other distressed investments include Prius Commercial Projects Pvt Ltd and Nuvoco Ltd, the Nirma Group unit that acquired Emami Cement Ltd.
