Bombay: Kotak Special Situations Fund (KSSF) – managed by Kotak Investment Advisors Limited (KIAL), said on Wednesday it had acquired 74% stake in HKR Roadways (HKR) and financed the company’s debt for a one-time settlement (OTS) with lenders existing for a total consideration of Rs 715 crore.
This financing and debt settlement is the first in the road sector for KSSF.
HKR, a Special Purpose Vehicle (SPV) owned by a consortium led by Gayatri Group, has been awarded a 25-year concession by the Andhra Pradesh Road Development Corporation (now Telangana Government). The four-lane toll highway project for the existing Hyderabad Karimnagar Ramagundan section of State Highway One (SH1) was under design, construction, financing, operation and handover. The 207 km toll motorway project began operations from June 2014. However, due to delays in the right-of-way and a significant underperformance in traffic compared to initial estimates, the account became a non-performing asset (NPA) with all lenders. .
The existing consortium of lenders at HKR has sanctioned an OTS of all contributions, subject to a Swiss Challenge auction. After payment of contributions, HKR will no longer be an NPA account.
Eshwar Karra, CEO of Kotak Special Situations Fund, KIAL, said: âAcquiring a controlling stake in stressed assets such as HKR is in line with our overall strategy of settling lenders in cash against their dues and resuming such projects. commercial operating date (COD), and we expect a turnaround in the next few years. KSSF will continue to offer full cash settlement, a much better option than non-cash options and is fully designed to fund prepackaged solutions under IBC, as the rules are notified. “
Kotak Investment Advisors Limited (KIAL), which is part of Kotak Mahindra Bank (Kotak), focuses on the alternative asset business. KIAL was established in early 2005 to put more emphasis on Kotak’s alternative asset practice and has raised / managed / advised a total of over $ 4.7 billion in various asset classes, including funds from private equity, real estate funds, infrastructure funds, special situations funds, listed strategies and investment advice.