Carlyle, Aion, Schneider in race to acquire Su-Kam
Three other potential bidders also vying for Su-Kam facing insolvency proceedings
Mumbai: Private equity fund Carlyle Group, special situations investor Aion Capital and France’s Schneider Electric are among potential suitors for Su-Kam Power Systems, which is facing corporate insolvency proceedings, two people with direct knowledge of the matter said.
All the suitors have submitted their expressions of interest and are expected to make binding offers by the deadline of 10 August, the people said, requesting anonymity due to confidentiality of the bidding process.
“There are three more potential bidders apart from these three,” said the first person cited above.
While the identities of the other three bidders could not be learnt immediately, the people said two are distressed assets funds while the third is an individual bidder.
Spokespeople at Carlyle, Aion and Schneider declined to comment.
Interest from Carlyle and Aion in Su-Kam underlines growing zeal among large private equity funds to crack deals in the insolvency space where several well known consumer brands are likely to be up for change of control.
Industry watchers say that while resolution of large assets, such as those in Reserve Bank of India’s initial list of 12 companies, was led by strategic buyers such as Tata Steel and JSW Steel to name a few, the next round of insolvency cases will likely witness greater participation from distressed assets funds.
“Going ahead, we expect active participation from private equity funds in resolving corporate insolvency cases” said K.V.S. Manian, president for corporate, institutional and investment banking at Kotak Mahindra Bank. “Deal sizes in some of the early cases were way too large for the funds to participate but there will be far more activity in the mid-size space,” he added.
Su-Kam has dues outstanding of nearly ₹370 crore with IDBI Bank and State Bank of India having the largest share.
The company was referred to the National Company Law Tribunal (NCLT) for bankruptcy proceedings by SBI in November last year. It was admitted in April by the court, following which Rajiv Chakraborty, partner, PwC India, was appointed resolution professional.
PwC didn’t respond to an email until press time on Wednesday.
Su-Kam claims to be one of India’s largest retail power solutions company and produces a wide range of devices which includes inverters, batteries and solar panels. The company was founded in 1998 by local entrepreneur Kunwer Sachdev.
For Carlyle, which has only invested in pure play growth and buyout deals in India so far, the potential transaction would mark its foray into the bankruptcy space where several large assets have changed hands in recent months.
Mint was the first to report on 25 June that Carlyle, which recently announced the closure of its fifth Asia buyout fund at $6.55 billion, was actively looking at investment opportunities in India’s distressed assets space and was evaluating consumer focussed businesses which are expected to come up for change of control under the Insolvency and Bankruptcy code ( IBC).
Mint also reported on 30 April that strategic bidders such as Greaves Cotton, Luminous Group and Microtek had shown early interest in acquiring Su-Kam and were in negotiations with lenders to potentially buy it but have not yet put a formal expression of interest.
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