Lone Star, IL&FS partner to invest in stressed infra assets

Private equity firm Lone Star Funds and infrastructure financing company IL&FS have announced collaboration to jointly invest in stressed infrastructure projects in India, with a capital pool of $550 million.

The collaboration could result in asset purchases of up to $2.5 billion, a joint statement said.

The objective of the move aligns with the objectives of the Government of India (GoI) and Reserve Bank of India in resolving stressed infrastructure assets, it said.

The collaboration seeks to assist banks, sponsors and asset reconstruction companies to recycle capital, thus permitting reinvestment of capital in fresh projects.

"Lone Star looks forward to collaborating with IL&FS in reviving Indian infrastructure assets and benefiting from IL&FS' long track record as a successful developer and manager of infrastructure projects in India," Lone Star's president, Asia Pacific, Mark Newman said.

The company invests globally in operating companies, real estate, equity, credit, and other financial assets.

"The India infrastructure sector is poised for revival as the evolving framework is becoming more conducive for resolving stressed assets. The collaboration with Lone Star, a firm with global asset turnaround experience that has invested capital in a range of industries, is strategic and presents the potential to attract sizable foreign direct investment (FDI) into India which supports the initiatives of GoI and RBI," IL&FS Chairman Ravi Parthasarathy said.

IL&FS has built a strong portfolio of infrastructure projects aggregating to $25 billion.