Barclays funds Rakesh Jhunjhunwalas’ Zydus deal

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Barclays has bankrolled Rakesh Jhunjhunwala’s recent acquisition of stake in Cadila’s animal healthcare business. An arm of the British banking group is learnt to have bought out the entire Rs 500-crore zero-coupon bond offering by Rare Equity Private Ltd (REPL), a Jhunjhunwala controlled company, in what was a rare borrowing by the ace investor in the bond market. The fund-raising is backed by pledge of shares and personal guarantee of Jhunjhunwala and his wife Rekha Jhunjhunwala. REPL issued non-convertible debentures (NCD) in two tranches, with maturities of three years and one day, and four years and one day, generating a yield of around 7.75% for Barclays. “It's a very good rate for the borrower.. it’s kind of name lending,” said a bond market source. According to the agreement, the stocks pledged are out of a preapproved list of shares provided by the lender or are scrips in the BSE100 basket, which form 80% of the total pledge. Stocks outside BSE100 are cap
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