Piramal Enterprises Ltd (PIRA.NS) has tied up with Dutch pension fund APG Asset Management to invest $1 billion in Indian infrastructure companies over three years, in a move that would help indebted firms access funds to complete projects.
A sluggish economy and stalled bureaucratic decision-making for the past two years thwarted capital investment and dented earnings, making it tough for infrastructure companies to raise funds and launch or complete road and power projects.
Piramal, controlled by billionaire Ajay Piramal, and APG will invest in local infrastructure companies through rupee-denominated mezzanine instruments, the two sides said in a statement on Wednesday.
Mezzanine debt, commonly used by private equity firms, comes between senior debt and equities.
Piramal and APG have each initially committed $375 million for investments under the alliance, the companies said.
Led by one of India's 50 richest people, Piramal has evolved from a textiles manufacturer in the mid-1980s into a group with interests in pharmaceuticals, glass, financial services and real estate.
Macquarie Capital acted as the sole financial advisor for the Piramal and APG deal.
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