Avantha set to win Rs 1,400cr financing deal from KKR

Mumbai: Gautam Thapar-led Avantha Holdings, the parent of Crompton Greaves and Ballarpur Industries, is close to winning a Rs 1,400-crore ($210-million) financing deal from KKR & Co to refinance existing short-term debt and revoke pledged shares, people directly familiar with the matter said. The funding support will also help the holding company to rejig growth for the $3.5-billion group.
This is the second time in recent years that KKR is lining up finances for Avantha, which has seen business restructurings and M&A activity, including the sale of Crompton Greaves’ consumer business to private equity investor Advent International.The transaction would involve Thapar replacing existing credit facilities with long-dated callable securities from KKR, sources said.
KKR is expected to bring in other partners as it finalises the financing package, they added. Avantha group comprises India’s largest power transmission and distribution equipment maker Crompton Greaves and also the largest paper manufacturer Ballarpur Industries. The group’s other interests include food processing, chemicals, agritech and business services.
When contacted, KKR declined to comment. Avantha spokesperson said the group could not comment on the queries immediately.
American private equity investor KKR has gone beyond ‘pure-play equity’ game to actively back Indian industrialists who have sought financing and restructuring support. It made a big push into the corporate credit market in a country with a shallow bond market, offering structured securities to both established and emerging Indian entrepreneurs, often striking repeat deals as in the case of Avantha and Thapar.
Led by for former Citibank India CEO Sanjay Nayar, KKR, which set up shop in India seven years ago, has deployed nearly $7 billion across structured finance, private equity, real estate financing and special situations, among others. In recent months, KKR has extended financing to smaller, emerging businesses such as Resonance Eduventures (where it is helping the promoter buy back shares from private equity arm of CLSA) and Radiant Life Care that operates two historic hospitals, B L Kapur in New Delhi and Balabhai Nanavati in Mumbai.