India’s Piramal Enterprises has signed a Memorandum of Understanding (MOU) with Bain Capital to invest in restructure situations in India.
The pair aim to establish a platform and either lend directly or acquiring debt to help businesses restructure.
The platform will look to invest across all industries, other than real estate, and have a particular focus on India’s infrastructure sector where strong growth prospects are predicted.
“We think the recent banking reforms focused on effective and timely resolution of stressed assets, augers well for players like us,” said Ajay Piramal, chairman of Piramal. “In addition, given our strong relationships and credibility with bankers, entrepreneurs and regulators, we are well-positioned to restructure these assets and play a meaningful role in resolving over-levered capital structures in the country, which in-turn would eventually fuel the growth in the economy.”
Bain Capital Credit, the special situation specialist arm of private equity powerhouse Bain Capital, is also looking to expand their capabilities in Asia by partnering with Piramal to tap the local market, according to Jonathan Lavine, the company’s co-managing partner.
Shantanu Nalavadi, the managing partner of Piramal Capital will lead this strategic partnership.
According to the statement, the two sponsors believe the investment opportunity close to $1billion over the next few years.
Other international players are rushing to take advantage in Indian’s current credit situation. Canadian alternative asset manager Brookfield Asset Management is committing $1 billion in a joint venture with the State Bank of India for stressed assets, while Apollo Global Management also joined with ICICI Bank to look at distressed assets this year.
Piramal is one of India’s large diversified companies, it has $3.3 billion of funds under management for its financial services arms. The firm has strategic alliances with top global pension funds like CPPIB Credit Investment and APG Asset Management.
Bain Capital Credit has invested in the capital structure and across the spectrum of credit strategies for 15 years, including leveraged loans, high-yield bonds, distressed debt, private lending, structured products, non-performing loans and equities.