Moneycontrol
Feb 04, 2016 02:08 PM IST | Source: CNBC-TV18

Funds invested by KKR will be used as growth capital: Sunteck

Discussing the strategic partnership between the two companies, Kamal Khetan, CMD of Sunteck Realty said that the funds will be ustilised as growth capital to buy stressed assets.

 
 
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Mumbai-based developer Sunteck Realty said that the investment firm KKR will invest Rs 150 crore in its two luxury housing projects.

Discussing the strategic partnership between the two companies, Kamal Khetan, CMD of Sunteck Realty said that the funds will be ustilised as growth capital to buy stressed assets.

The timeline for the partnership is three to four years and KKR will receive returns of upwards of 18 percent, Khetan said.

Sunteck is looking to buy stressed assets and some announcement will be made
regarding same in next three to four months, he said.

Below is the transcript of Kamal Khetan’s interview with Reema Tendulkar and Nigel D’souza on CNBC-TV18.

Nigel: Could you detail first what exactly will this Rs 150 crore be used for?

A: This Rs 150 crore is for the growth capital and it is to buy the distressed assets. The idea is to develop a larger relationship with KKR to jointly work on acquisitions and partnering for growth.

Reema: Could you give us some details of the deal that you have with KKR? What is the internal rate of return (IRR) that is committed between the two companies? Is there a timeline for which they made this investment?

A: Obviously, they are looking at this project. They are looking at an exit around 3-4 years and the timeline is 3-4 years and since it is an equity kind of investment, they would look anything at returns of upward of around 18 percent or so.

Nigel: You said that you were looking at some distressed assets, could you tell us when exactly can we hear from that and when exactly can this be deployed? And second part, I am just going through the press release. The management of KKR has said that it is the beginning of a new relationship. Is this is going to be saying at a project basis or do you think that in fact, even at the listed entity basis, we could see some investment coming in?

A: Distressed assets, we are already looking at it and it will be in the next three to four months and maybe we will be able to announce something. We are looking very aggressively and as far as the investment in the project level that is sure, I do not want to comment on any speculative that they will be investing in the entity level or not, that would be quite speculative.
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