The funds raised will be utilised partly for the acquisition of distressed assets and servicing of debt. This fundraising comes ahead of the repayment obligation of ₹1,250 crore due on June 1, which was borrowed in December 2019 at a lower rate of 11.5%. This is the largest fundraising in over three years for Edelweiss ARC, considering its previous fundraising of ₹1,250 crore in December 2019.
“Edelweiss ARC has decided to raise funds through NCDs as a precautionary measure to ensure they maintain sufficient cash for acquisition and debt servicing purposes,” a source said. “By doing so, they want to avoid a situation where they exhaust cash and are unable to acquire distressed loans. They have sufficient cash to service debt obligations and this fundraise will ensure that they have ample liquidity for both debt servicing and debt acquisition opportunities.”
An Edelweiss ARC spokesperson did not respond to a request for comment.
As of April 30, 2023, Edelweiss ARC reported cash of ₹937 crore. Edelweiss ARC has expanded its asset acquisition strategy beyond corporate loan assets to include retail loan assets as well.