Edelweiss on the prowl to buy big-ticket assets in infra space

Edelweiss India Special Assets Fund (EISAF), along with Canada’s leading institutional fund manager CDPQ will look to invest $1.5-2 billion (₹12,000-13,000 crore) over the next three years in India’s distressed assets space, Siby Antony, Managing Director & CEO, Edelweiss Asset Reconstruction Company, has said.

The funds would be mainly used to buy big-ticket infrastructure assets in power and steel sectors — large operating assets that are faced with financial strain, Antony told BusinessLine here on Friday.

Antony said Edelweiss ARC was working very closely with banks. “We have identified a few large cases where banks have a serious problem — where they have invoked SDR. We will look to buy the equity owned by banks through our stressed asset fund,” he said.

Antony said EISAF will only look at power plants that have power purchase agreements, EBITDA earning but not enough for servicing the banks. It will be the first time EISAF will buy large power assets.

Edelweiss ARC has started a turnaround vertical that would help turn around some of the distressed assets acquired from banks.

This vertical is currently managing the Karaikal port and is also doing the cash management of Ballarpur Paper.

“In India, there are no turnaround management services. We will be the first to do that. We have already set up an advisory board for the turnaround business purpose,” he said. This advisory board comprises SK Roongta (former SAIL Chairman), Sankarlingam (former NTPC Chairman) and MS Mehta (former Senior Executive with Vedanta Group).

Antony said Edelweiss has, over the last three-and-a-half years, invested ₹4,500 crore in its asset reconstruction business — actual cash that has gone to the banks for buying distressed assets. In 2016-17 alone, Edelweiss ARC purchased ₹23,000 crore worth of NPAs at a price of ₹11,500 crore.

“The salient part of our 2016-17 business was that all the assets we purchased were good operating assets,” he said.

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