A fund managed by the largest bank in the US, JP Morgan Chase & Co will acquire a nearly 20-per cent stake in Nikhil Gandhi promoted SKIL Infrastructure for Rs1,900 crore ($400 million), Reuters today reported, citing two sources with direct knowledge of the development.
Mumbai-based SKIL, which holds a 45-per cent stake in Pipavav Defence & Offshore Engineering and a 21.02-per cent in Everonn Education, will use the funds to pare debt and add scale to its operations the news agency said.
SKIL will use a portion of the funds to repay loans it took to buy 19.4 per cent of Pipavav from Delhi-based engineering and construction group Punj Lloyd last year. It will also invest in defence and education.
Manhattan-based JP Morgan Chase investment comes after billionaire investor Rakesh Jhunjhunwala, his wife Rekha and close associate Utpal Sheth agreed to invest Rs82 crore last week Pipavav Defence and Offshore Engineering.
Pipavav Defence and Offshore Engineering Company Limited (formerly Pipavav Shipyard) had announced last week that its would issue securities worth Rs81.90 crore to Jhunjhunwala, his wife and close associate Utpal Sheth.
As on 31 March 2011, SKIL had total debt of Rs1,351 crore. The company has pledged its 38.47 per cent or 99.6 per cent of its stake in Pipavav to financial institutions to secure debt.
Foreign institutional investors hold 8.55 per cent of the company, while domestic institutions hold 11.56 per cent.
In June, SKIL had filed its draft red herring prospectus with Sebi for Pipavav's initial public offer (IPO) for raising Rs1,125 crore.