Piramal Enterprises and Bain Capital Credit-promoted India Resurgence Fund (IndiaRF) on Tuesday introduced funding of as much as Rs 615 crore (USD 83 million) in Gujarat-based auto parts main Setco Group.
The transaction can be carried out in a two-step course of with Setco Automotive Ltd (Setco) transferring its clutch enterprise into its subsidiary Setco Auto Systems Pvt Ltd (SASPL).
Subsequently, IndiaRF together with its associates will make investments by a senior debt facility and 35 per cent fairness stake in SASPL, IndiaRF mentioned in a press release.
IndiaRF is an India-focused distressed funding platform.
“The investment proceeds will be used for growth capital and providing working capital to enable the businesses of (SASPL) to grow on the back of anticipated recovery in the commercial vehicles market, meet the demand in the replacement market and re-finance/repay debt facilities,” it added.
Commenting on the funding in Setco, IndiaRF Managing Director Shantanu Nalavadi mentioned, “Our partnership will drive a two-fold strategy to restructure the balance sheet of the company as we also work closely with the promoters and management team, to drive rapid revenue growth and sustainable improvement in profitability.”
IndiaRF continues to stay centered on offering long-term strategic options that allow an efficient turnaround to profitability for prime quality firms, Nalavadi added.
Setco Automotive Chairman & Managing Director Harish Sheth mentioned IndiaRF”s funding will herald important strategic operational enchancment in each SASPL and Lava Cast, an built-in foundry and machined casting agency.
“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,” he added.
Setco Group is concentrated on manufacturing and advertising of clutches for industrial automobiles for unique gear producers (OEMs), together with catering to the aftermarket for OEM manufacturers and the impartial aftermarket. It can be backward built-in, manufacturing castings by wholly-owned subsidiary, Lava Cast Pvt Ltd.