As part of the transaction, Setco Automotive Limited (Setco) will transfer its clutch business into a subsidiary, Setco Auto Systems Private Limited (SASPL), into which IndiaRF will invest through a senior debt facility and 35% equity stake in SASPL, said a company statement.
The investment proceeds will be used for growth capital and providing working capital to enable the businesses to grow on the back of anticipated recovery in the commercial vehicles market, meet the demand in the replacement market and re-finance / repay debt facilities, it added.
“Our partnership will drive a twofold strategy to restructure the balance sheet of the company as we also work closely with the promoters and management team, to drive rapid revenue growth and sustainable improvement in profitability,” said Shantanu Nalavadi, Managing Director, IndiaRF.
“We look forward to leveraging their proven global expertise in restructuring and turnarounds, and are certain that our combined efforts will help accelerate our ambitious growth trajectory towards improved performance and profitability benefiting all its stakeholders,” said Harish Sheth, Chairman & Managing Director, Setco Automotive.
Setco Group is an automotive component company focused on manufacturing and marketing of clutches for commercial vehicles for original equipment manufacturers (OEMs) including catering to aftermarket for OEM brands and the independent aftermarket.
SASPL has recently diversified into the tractor market and has started supplies to some of the tractor OEMs with few more in the pipeline.
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