With the Government of India (GoI) and the Reserve Bank of India (RBI) focusing on resolving stressed infrastructure assets, private equity firm Lone Star Funds and infrastructure financing company IL&FS, have announced a collaboration, to invest and cash-in on stressed infrastructure projects in India, with a capital pool of USD 550 million. The collaboration could result in asset purchases of up to USD 2.5 billion, a joint statement said.
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The collaboration seeks to assist banks, sponsors and asset reconstruction companies to recycle capital, thus, permitting reinvestment of capital in fresh projects.
“Lone Star looks forward to collaborating with IL&FS, in reviving Indian infrastructure assets and benefiting from IL&FS’ long track record as a successful developer and manager of infrastructure projects in India,” Lone Star’s president, Asia-Pacific, Mark Newman said. The company invests globally in operating companies, real estate, equity, credit, and other financial assets.
“India’s infrastructure sector is poised for revival, as the evolving framework is becoming more conducive for resolving stressed assets. The collaboration with Lone Star, a firm with global asset turnaround experience that has invested capital in a range of industries, is strategic and presents the potential to attract sizable foreign direct investment (FDI) into India, which supports the initiatives of the GoI and RBI,” IL&FS chairman, Ravi Parthasarathy said. IL&FS has built a portfolio of infrastructure projects aggregating to USD 25 billion.
