Piramal, Bain form distressed asset partnership

The two firms will form a platform for direct investments in distressed businesses, along with acquisition of their debt, for the purpose of restructuring. All sectors other than real estate will be considered for investment, with preference for companies that require restructuring and have strong growth prospects linked to India's infrastructure and consumption needs.

Piramal and Bain did not specify the amount of money they planned to commit, but in a statement said they believed there could be over $1 billion in investment opportunities for distressed assets in the next few years. Indian regulators have recently indicated increased support for creditors attempting to recoup their investments in non-performing assets (NPAs).

"We think the recent banking reforms focused on effective and timely resolution of stressed assets augers well for players like us," said Piramal Chairman Ajay Piramal. "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."

The Bain-Piramal partnership is the latest in a wave of PE investors seeing opportunity in regulators' tougher approach to Indian debt. Firms that have indicated interest in distressed assets include Apollo Global Management, which earlier this year formed a joint venture with ICICI Bank aimed at NPAs in India (following an earlier emerging markets-focused distressed asset JV with IFC). Canada's Brookfield Asset Management is also planning a INR70 billion ($1 billion) distress fund along with the State Bank of India, and TPG Capital has indicated it plans to invest up to $3 billion in Indian NPAs over the next three years.

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• Topics
• South Asia
• Credit/Special Situations
• Fundraising
• India
• Bain Capital Asia