Private equity (PE) firm KKR on Monday acquired a 10% stake in CG Power and Industrial Solutions Ltd by invoking the pledge on shares provided as collateral for credit facilities extended to entities related to promoter Gautam Thapar.
The next few days are likely to reveal KKR’s plans for the company, given that there is no identifiable management at the moment, after the board removed chairman Thapar and the chief executive officer (CEO) also put in his papers.
According to stock exchange data, KKR India Debt Opportunities Fund II and KKR India Financial Services have acquired over 62.6 million shares in CG Power, from Vistra ITCL (India) Ltd. As on 30 June, Vistra ITCL held a 21.63% stake in the company.
“KKR India Financial Services Ltd and KKR India Debt Opportunities Fund II have, in exercise of their rights in respect of credit facilities extended to Avantha Holdings Ltd and its subsidiary Salient Financial Solutions Ltd and through the enforcement of pledges created by Avantha Holdings Ltd, respectively, acquired 50,736,588 and 11,938,021 equity shares of CG Power and Industrial Solutions Ltd through a transaction on the stock exchange," the PE firm said in a statement on Monday.
This translates into a total of just under 10%, the PE firm said.
In March, CG Power had said creditors had invoked 67.6 million pledged equity shares, constituting 10.8% of the company’s share capital, held by one of its promoters, Avantha Holdings. Vistra ITCL on behalf of debenture holders—BOI AXA Credit Risk Fund, KKR India Financial Services and KKR India Debt Opportunities Fund II—had invoked these shares.
Besides, in March, private sector lender Yes Bank had acquired 80 million shares, or a 12.8% stake, in CG Power on invocation of pledged shares of its promoter.
On 20 August, the board of CG Power and Industrial Solutions Ltd said the company will restate accounts after discovering “significant accounting irregularities" and governance lapses, sending its shares plunging by the maximum daily limit of 20%.
Thapar was removed from CG Power’s chairmanship on 30 August. The company’s board is considering selling non-core assets and exploring various fundraising avenues to deleverage the company and optimize its operations.
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