Moneycontrol Bureau
Edelweiss Financial Services shares surged more than 11 percent intraday to hit Rs 126, the highest level since January 2008, on Monday after the North American pension fund manager announced a long-term partnership agreement with Edelweiss Group.
"The agreement includes target investments by Caisse de dépôt et placement du Québec (CDPQ) of Rs 5,000 crore over four years that will provide Edelweiss Group with capital to invest in stressed assets and private debt opportunities in India," the financial firm said in its filing.
CDPQ has significant experience and expertise in specialized corporate credit and is a leader in stressed asset investment.
The company said this platform would invest in assets with the aim of restructuring debt and turning around companies, as well as becoming the provider of financing to Indian entrepreneurs and companies.
It further said these investments, to be carried out by Edelweiss ARC and through different Edelweiss funds, would result in the purchase of non-performing loans from Indian banks and investments in private debt of growing Indian companies.
Additionally, CDPQ will also be acquiring a 20 percent equity stake in Edelweiss Asset Reconstruction Company (EARC), the specialist in revival and resolution of stressed assets.
"The partnership aims to channel between Rs 12,000-14,000 crore (including CDPQ's Rs 5,000 crore and investments from Edelweiss Group and other international institutional investors) into private debt and restructuring of stressed assets in the country," Edelweiss said.
In addition to CDPQ's proposed 20 percent stake, the other shareholders in EARC will be a Scandinavian insurance company with a 4 percent stake, 16 percent will be held by Indian investors and the balance by the Edelweiss Group.
CDPQ started its India operations by opening New Delhi-based office in March 2016.
At 10:50 hours IST, the scrip of Edelweiss Financial Services was quoting at Rs 123.30, up Rs 10.05, or 8.87 percent on the BSE.Posted by Sunil Shankar Matkar
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
