*DE Shaw Group* plans to buy 49% stake in *Pegasus Asset Reconstruction Company Pvt Ltd* for Rs 122cr after getting necessary approvals from GoI and RBI. The hedge fund will buy 23% from the Bhimjyani family and 26% from Rakesh Jhunjhunwala.
Post deal, the Bhimjyani family will hold 50% stake in the company while, Rakesh Jhunjhunwala will hold 1%. Under the existing guidelines, FDI investment in asset reconstruction is allowed up to 49%. However, in case any individual FDI exceeds 10 per cent, it is considered a sponsor of the ARC and has to meet the provisions of section 3(3) (f) of the Securitisation and Reconstruction of Financial Assets and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002. Transaction Reference: ET<http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/DE-Shaw-looks-to-buy-49-in-Pegasus-ARC/articleshow/5691811.cms> Transaction Note *Pegasus Asset Reconstruction Company*, established in 2004, is promoted by *Bhimjyani Family* and *Rakesh Jhunjhunwala*. The company provides asset recovery and advisory services to automobile, paper, pharmaceutical, steel, and textile industries in India. In 2008, *Deutsche Bank AG* was to pick up 26% stake in Pegasus. DE Shaw is a $30-bn New York Based hedge fund that has invested over $2bn in India in education, media, outsourcing, real estate, renewable energy and infrastructure sector. It has managed to make over 30% returns from its Indian portfolio. The fund recently exited five of its investments, including DLF Assets, Unitech and Afcons. Last month, FT<http://www.ft.com/cms/s/0/772acc04-151a-11df-ad58-00144feab49a.html?nclick_check=1>has reported that DE Shaw had set up an in-house team to look at buying portfolios of distressed assets. Buying stake in an Indian ARC seems like a strategy DE Shaw is following.. The local distressed asset market is worth Rs 200,000cr, which is almost 8% of the GDP, with an annual accumulation of nearly Rs 20,000 cr. The oldest player and market leader is *ARCIL*- floated by SBI, IDBI, ICICI Bank and Punjab National Bank in 2003. The other licence holders are UTI- ASREC, International Asset Reconstruction Company , Asset Care Enterprise and Dhir & Dhir Asset Reconstruction and Securities Co. Last year, ARCIL announced its plans to launch a $600mn fund, out of which 20% to be contributed by ARCIL. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
