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Kohlberg Kravis Roberts (KKR), leading global private equity major, continues its debt financing into Indian conglomerates. KKR India is set to invest about Rs 600 crore in two companies, Gurgaon-based Asahi India Glass and Chennai-based Archean Group, through a structured debt transaction.
According to people in the know, Asahi will receive Rs 200-crore funding. Archean will get its second tranche of funding, worth Rs 400 crore. KKR has outbid Apollo-ICICI Venture Fund to invest in Asahi. AION Capital Partners, a joint venture between Apollo Global Management and ICICI Venture, which runs a special situation fund, was also engaged in discussions for investment in Asahi.
The fund will be used by Asahi to refinance existing loans. It is the country's leading entity in the car and building glass segment, saying it has 77 per cent of the former market. It was jointly promoted by the Delhi-based Labroo family, Asahi Glass Co of Japan and Maruti Suzuki. Of the promoter holding of 54.39 per cent, Maruti Suzuki has 11.1 per cent and Asahi Glass Co holds 21.2 per cent. The rest is with the Labroo family and others.
When asked, Sanjay Nayar, chief executive at KKR India, declined to comment. Mails to Asahi Glass and Archean did not elicit a response.
The $800-mn Archean Group got $20-mn (Rs 120 crore) funding from KKR in the holding company in May 2014. The latest injection of Rs 400-crore will be used for Archean Chemical Industries' project for production of sulphate of potash, bromine and industrial salt at its facility in Kutch, Gujarat. Established in 1984 by P B Anandam, the Group has diversified business interests - building material, industrial salt, industrial chemicals & fertilisers, shipping, mining & minerals and oil & gas services.
KKR has been active in debt and mezzanine funding, besides corporate lending, for Indian conglomerates. In the past five years, it has put through a little more than $2 billion of structured financing to 21 business groups in this country. Examples are structured loans such as Rs 1,000 crore to GMR Holdings and Rs 1,900 crore to Amtek Auto, and Rs 550-crore investments in Apollo Hospitals, $100-million in Avantha Group and investments in Sanmar Group and Max India.
Last month, KKR joined hands with Singapore's sovereign wealth fund GIC, for setting up another non-banking financial company to provide loans for the real estate sector. KKR India is also holding discussions to acquire a a controlling stake in International Asset Reconstruction Company Pvt Ltd, which is into buying distressed assets from banks. In private equity, KKR has been active in India since 2006, with total equity investment of close to $2 billion (Rs 12,300 crore).
FRESH FUNDS
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Rs 200 crore: Funding that Asahi Glass will receive
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Rs 400 crore: Funding that Archean is slated to receive
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77%: Glass market share that Asahi claims to command in India
