IFC, Mount Kellett back India’s Jain Irrigation Systems

According to a regulatory filing, Jain will issue INR4.05 billion in preferential shares at a minimum of IRN80 per share; INR3.05 billion in five-year foreign currency convertible bonds (FCCBs), with a conversion price of INR115 per share, a coupon of 3% and a yield to maturity of 6%; INR4.16 billion in external commercial borrowings (ECB), valid for 6-10 years; and INR647 million in warrants.

IFC is "contributing significantly to the convertible bond issue" as well as picking up a portion of the equity shares and ECB. Mount Kellett's involvement is restricted to the equity issue. Rabobank and a combination of European development finance institutions will cover the remainder of the ECB.

"We are glad that we have been able to put together significant resource raising at fairly attractive terms from quality investors like International Finance Corporation (IFC), lenders like Rabobank and others during this volatile and challenging environment and uncertain market conditions," said Anil B. Jain, the company's managing director.

The equity issuance is expected to allow Jain to convert short-term liabilities into long-term liabilities, as well as providing liquidity for operations. The savings on interest alone are projected to reach between INR800 million and INR1 billion, which should improve Jain's gearing and credit rating.

Mount Kellett, a private equity firm founded by former Goldman Sachs executive Mark McGoldrick, closed its second fund at $4 billion in April. The vehicle, which targets special situation and opportunistic investments, is $1 billion larger than its predecessor, raised in 2009. Around 40% of the first fund was earmarked for deployment in Asia, particularly China.

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• Topics
• Credit/Special Situations
• South Asia
• Industrials
• Restructuring
• Mount Kellet Capital
• IFC
• Distress
• India
• manufacturing