Financial services firm Edelweiss today announced a long-term partnership with Canada’s Caisse de dépôt et placement du Québec (CDPQ), which will include investing Rs 5,000 crore over next four years and acquiring 20 per cent stake in Edelweiss Asset Reconstruction Company.
“The agreement…will provide Edelweiss Group with capital to invest in stressed assets and private debt opportunities in India. The partnership creates one of the largest and most diversified credit investing platforms in India,” Edelweiss said in a BSE filing.
These investments, to be carried out by Edelweiss ARC (EARC) and through different Edelweiss funds, will result in the purchase of nonperforming loans from Indian banks and investments in private debt of growing Indian companies, it added.
“By becoming a partner of Edelweiss, CDPQ is looking to support its growth for many years to come and, ultimately, participate in the emergence of new innovative and successful businesses in India,” said Michael Sabia, President and Chief Executive Officer at CDPQ.
CDPQ will also acquire a 20 per cent equity stake in EARC.
“CDPQ will sit on EARC’s board of directors and on the Edelweiss Group investment committee overseeing private debt and stressed assets investments,” the company said.
In addition to CDPQ’s proposed 20 per cent stake, the other shareholders in EARC will be a Scandinavian insurance company with a 4 per cent stake, 16 per cent will be held by Indian investors and the balance by the Edelweiss Group.
“The acquisition and shareholding as mentioned above are subject to standard closing conditions, completion of legal documentation and approval by regulatory authorities,” the company added.
One of North America’s largest pension fund managers, CDPQ opened CDPQ India, its New Delhi-based office, in March 2016.