MUMBAI U.S. private equity firm Lone Star has joined up with Indian infrastructure financier IL&FS to invest in struggling Indian infrastructure projects, the companies said on Sunday.
The collaboration will have an investment capital pool of $550 million, which could result in asset purchases of up to $2.5 billion, the partners said.
India's banks have been saddled with more than $130 billion of soured loans, mostly notably from sectors such as steel and power, hurting new credit and economic growth. Resolving soured loans is one of the main targets for the government and the central bank.
The Lone Star-IL&FS collaboration "seeks to assist banks, sponsors and asset reconstruction companies recycle capital, thus permitting reinvestment capital in fresh projects," the companies said.
(Reporting by Devidutta Tripathy; Editing by Mark Potter)