Asset reconstruction company Asset Care Reconstruction Enterprise Limited (ACRE) has taken over Jayaswal Neco Industries Limited's 32% stake, restructuring its Rs 5,661 crore debt.
The asset reconstruction company (ARC) is backed by different global distressed funds and investors like Oaktree Capital, Davidson Kempner Capital Management, and Ares SSG. According to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, debt restructuring was done and is one of the largest pre-insolvency restructurings. The firm was in the Reserve Bank of India’s (RBI’s) second list for commencement of insolvency issued in December 2017. The debt restructuring, amongst others, included the conversion of debt and allotment of 31.44% equity shares of the firm to the ACRE Trusts on a fully diluted basis. This would also be the first case of the Competition Commission of India’s (CCI’s) clearance for the acquisition of over 25% equity shares of a company on a pre-insolvency transaction by an asset reconstruction company. This will be the biggest deal in India’s stressed assets segment by Bank of America. Khaitan & Co recommended the company on the transaction. The company reported sales of Rs 3,705 crore and a loss of Rs 558 crore, and a loss of Rs 558 crore for the fiscal year ending March 2021. Image Source
