Gainwell group company Indocrest Defence Solutions has infused Rs 120 crore into heavy equipment maker Tractors India, picking up a 42.7 per cent stake in the city-based company.

The fresh investment is set to make the company debt-free after the lenders went for a one time settlement of debt with a haircut of 65 per cent. TIL was under financial stress since the Covid pandemic in 2020 and had defaulted on servicing its payment obligations to the lenders. The account was classified as a non-performing asset.

With the funds coming in, TIL will also have a restructuring of its board. Six new members will join, including three wholetime directors and three independent directors, replacing the existing board.

Gainwell group promoter Sunil Chaturvedi, who has been appointed as the director of TIL, is set to replace outgoing chairman and managing director Sumit Mazumder as the next CMD, subject to shareholders’ approval.

“Today we infused Rs 120 crore into TIL out of which approximately Rs 70 crore has been paid against preferential allotment of shares. With that we are already 42.7 per cent in TIL,” Chaturvedi told The Telegraph.

“We have offered all the lenders a one time settlement of their debt. With the Rs 120 crore that we are bringing in, we will be able to settle all the lenders who will go out.”