India Resurgence Fund (IndiaRF), which is promoted by Piramal Enterprises Limited and Bain Capital Credit, along with its affiliates has announced an investment of up to ₹615 crore in Gujarat-based Setco Group.

As part of the transaction, Setco Automotive will transfer its clutch business into a subsidiary, Setco Auto Systems Private Limited (SASPL), into which IndiaRF will invest through a senior debt facility.

“The investment proceeds will be used for growth capital and providing working capital to enable the businesses to grow on the back of an anticipated recovery in the commercial vehicles market, meet the demand in the replacement market and re-finance and repay debt facilities,” said a statement on Tuesday.

Shantanu Nalavadi, Managing Director, IndiaRF, said the partnership will drive a two-fold strategy to restructure the balance sheet of the company and to drive rapid revenue growth and sustainable improvement in profitability.

“IndiaRF continues to remain focused on providing long-term strategic solutions that enable an effective turnaround to profitability for high-quality companies,” he said.

Harish Sheth, Chairman and Managing Director, Setco Automotive, said, “We are delighted to partner with IndiaRF at this critical juncture in Setco Automotive’s journey. We look forward to leveraging their proven global expertise in restructuring and turnarounds and are certain that our combined efforts will help accelerate our ambitious growth trajectory towards improved performance and profitability benefiting all its stakeholders.”

Wadia Ghandy and Co was the exclusive advisor to Setco Group for this transaction.

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