SBI launches $1-bn stressed assets fund with Brookfield

India’s largest lender State Bank of India (SBI) and Brookfield Asset Management have set up a joint venture with initial commitment of over $1 billion (Rs 7,000 crore) to make investments in businesses with stressed assets.

India’s largest lender State Bank of India (SBI) and Brookfield Asset Management have set up a joint venture with initial commitment of over $1 billion (Rs 7,000 crore) to make investments in businesses with stressed assets.

SBI will contribute up to 5% of its total investments.

Brookfield will commit around Rs 7,000 crore and State Bank of India up to 5% of the total investments into stressed assets, the state-owned bank said in a statement.

“This approach of collaborating with global players will enable the banks in general and SBI in particular, to find alternate solution for resolution of stressed assets,” chairman Arundhati Bhattacharya said in the statement.

The joint venture will evaluate and invest in various stressed assets, relying upon Brookfield’s operational expertise to manage recapitalised businesses.

Bhattacharya said such an approach will be more acceptable to both the lenders and the borrowers in cases where the promoters are not able to infuse funds and lenders are reluctant to take additional exposure.

At a later stage, the JV may seek participation from other lenders in the identified assets, the bank said.