[MTC Global] Brookfield JV with SBI

Dear All,

Canada's Brookfield Asset Management Inc plans to put in about Rs 7,000 crore ($1.04 billion) into a planned joint venture with State Bank of India that will invest in distressed assets, India's largest lender said on Wednesday.

Brookfield and SBI join a raft of companies looking to invest in stressed assets that the Reserve Bank of India estimates has touched $120 billion, or 11.5% of local banks' total loans, as corporate borrowers—especially in infrastructure and commodities sectors—struggle to repay debts.

• SBI said in a statement that, as per an initial pact signed with Brookfield, the bank will contribute up to 5% of the total investments into stressed assets. The proposed JV may, at a later stage, seek participation from other lenders in the identified assets.
• The JV will independently evaluate and invest in stressed assets, and will rely upon Brookfield's operational expertise to manage recapitalized businesses.
• SBI chairperson Arundhati Bhattacharya said the move will enable banks in general and SBI, in particular, to find alternate solutions to deal with stressed assets. Such an approach will be more acceptable to both the lenders and the borrowers in cases where the promoters are unable to infuse funds and lenders are reluctant to take additional exposure, she added.
• For the Canadian company, this JV will expand its private equity platform in the country, said Anuj Ranjan, head of Brookfield India.

Cheers,

G.S.Autee

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