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SC Lowy, a hedge fund based in Hong Kong, has recently made strategic investments in the debt of two significant projects. Their investments include INR 275 crore in bonds issued by Pharande Township, a real estate developer based in Pune, and INR 100 crore in the Srinagar-Banihal Expressway project.
The non-convertible debentures (NCDs) acquired by SC Lowy's alternative investment fund offer varying terms. While Pharande Township's NCDs do not yield any interest until June 30, 2024, they offer a substantial 14% interest rate until their maturity on March 31, 2026. In contrast, the Srinagar-Banihal Expressway project offers a higher interest rate of 16% on its NCDs. The funds raised from these investments will primarily be utilized for loan repayments and working capital requirements.
Srinagar-Banihal Expressway Ltd, a subsidiary of Ramky Infrastructure, plans to utilize the proceeds from the NCDs to repay an inter-corporate deposit, facilitating financial restructuring. Notably, SBEL had recently finalized a one-time settlement agreement with its asset reconstruction companies (ARCs) in March 2023, amounting to INR 1195 crore with an interest rate of 11.25% per annum. This agreement was crucial for the company to clear its outstanding obligations and pave the way for further financial transactions.
By December 31, 2023, SBEL had already paid INR 679 crore towards its settlement obligations, obtaining extensions from ARCs like Asset Reconstruction Co (India) Ltd and Pridhvi Asset Reconstruction. The remaining amount of INR 516 crore, along with accrued interest, was successfully settled in January 2024, marking the completion of all dues to ARCs.
SBEL is facing challenges with deductions from annuity payments by NHAI. They're yet to receive INR 248 crore due to issues like using substandard steel and deviating from embankment heights. SBEL is taking steps to recover these deductions from NHAI and is confident of getting the full amount back.
Overall, SC Lowy's investments in these projects show their confidence in the Indian market and their commitment to supporting key infrastructure developments. These investments not only provide crucial funding for projects but also contribute to the financial stability and growth of the companies involved. Despite challenges like NHAI deductions, SBEL's successful settlement of outstanding obligations reflects a positive trend for the projects and their stakeholders, bringing optimism for future developments in India's infrastructure sector.
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