Mumbai: Mumbai-based distressed assets investor, Eight Capital Management LLC and London and New York based emerging markets hedge fund, Emso Asset Management Ltd. on Thursday said that they are acquiring Ambit Capital’s 47.5% stake in Ambit Flowers Asset Reconstruction Company, the ARC said in a press statement.
After the transaction, the company will be renamed as J.C. Flowers Asset Reconstruction Company (JCFARC), with JC Flowers as the largest shareholder with a 47.5% holding. Mint reported in September 2018 that Ambit Capital was looking to sell its stake in its asset reconstruction joint venture with J.C. Flowers and Co.
“With more than 10 years of experience investing in the Indian credit markets, Eight Capital’s deep domain knowledge and strong relationships with market participants makes them an ideal local partner for the JCFARC,” said Thierry Porte, managing director at J.C. Flowers.
Founded in early 2016, the asset reconstruction firm started as a 50:50 partnership by Ashok Wadhwa-led Ambit Holdings and New York based private equity firm, J.C. Flowers and Co., to invest in the Indian distressed asset market.
“I am excited to partner with J.C. Flowers and access the firm’s specialized knowledge and deep relationships in the financial services industry across the globe. J.C. Flowers has an established past track record of turning around troubled financials firms with large pools of non-performing loans which we expect will translate into a substantial advantage for our business,” said Ravi Chachra, chairman of Eight Capital. “In addition, Emso will bring its vast experience of investing in emerging markets across geographies and sectors to strengthen the partnership.”
Going ahead, the ARC will be managed by Eight Capital’s team in Mumbai and will continue to purchase non-performing loans from Indian banks in target companies that have the potential to be turned around through balance sheet restructuring and infusion of fresh capital. The bad loans will be acquired with the ARC’s own capital as well as on behalf of its investors.
“We look forward to continuing our longstanding relationship with the principals of Eight Capital and establishing a new relationship with J.C. Flowers in what we believe to be one of the timeliest investment opportunities within emerging markets today,” said Rory McGregor, chief operating officer of Emso Asset Management. “The senior team at Emso has on average more than 20 years of experience deploying capital in the emerging markets fixed income space and we are fortunate to partner with these two experienced firms to develop a new investment platform in one of the fastest growing emerging markets.”