KKR investment to come in 3 months, says IARC

International Asset Reconstruction Company (IARC) today said even after almost a year since announcing a deal, investment from global private equity major KKR is yet to come in and it will take three more months for the agreement to fructify.
"On KKR, we have been in dialogue. It has come to a very formal stage now. Any such involvement needs (approval of) their shareholders, other stakeholders and FIPB (Foreign Investment Promotion Board)," IARC Managing Director and Chief Executive Birendra Kumar told reporters here.
He said it will take up to three more months before the deal announced last December fructifies and IARC gets the new investor in form of KKR.

Kumar said the December announcement was made only following a "primary interest" shown by KKR, and it requires the nod of IARC's own shareholders, which include HDFC Bank, ICICI Bank and Tata Capital, before it comes into force.
IARC will soon be approaching the FIPB and the RBI for their nods on the investment, he said.
Media reports last December had said KKR will buy a controlling stake in the company, dealing with stressed assets, in a multi-stage transaction starting with an infusion of Rs 300 crore.

Kumar today said even though the investment is yet to come in, the company has already started working with the leading private equity fund. "We have been working together looking at assets, how we can really workout even without a formal investment taking place."

IARC, which has already raised around Rs 420 crore in two dedicated funds, is concentrating on recoveries at present and has not bought any stressed assets from lenders, which are plagued with high NPAs.
It has over 500 assets with Rs 1,500 crore under management, he said.
Around 50 per cent of the first fund of Rs 240 crore has already been deployed, while for the second fund, it has invested Rs 100 crore of the Rs 180 crore that was raised, he added.
Commenting on the recoveries, Kumar said getting money from the smaller accounts is easier and the company faces "mighty challenges" while dealing with bigger accounts.

To overcome this issue, it is avoiding to take cases to courts and preferring newer methods of resolution outside the legal system, he said.