New Delhi: Gautam Thapar family may lose control of CG Power and Industrial Holdings after it defaulted on payments forcing private equity giant KKR to convert its loans into equity. Two other lenders including Yes Bank and BOI AXA are in the process of doing the same in a move that that will reduce the Thapar family to a minority. KKR now owns about 10.8 per cent in the firm and the combined stake of the lenders is set to touch 30 per cent if YES and others go ahead with their conversion. The Thapar family held about 34.42 per cent in the capital goods firm till KKR’s conversion. In addition, the creditors have nudged the board of CG Power to remove B Hariharan, director and group CFO of Avantha Group as a promoter-nominee and appointed Narayan Seshadri, former chairman of AstraZeneca India and former partner of KPMG India as Independent Director. The CG Power Board has also constituted an empowered operating sub-committee chaired by an independent director to drive operational improvements. Both these moves are said to be part of a plan to make CG Power into a board-managed business with a mandate to improve governance, and enhance value for all stakeholders, said one of the people mentioned above. Thapar had signed a deal with KKR and other lenders when flagship Avantha Holdings took a loan almost three years back. CG Power is a leading manufacturer of ultra-high voltage transformers and switchgears in the world and is a spin-off from the demerger of Crompton Greaves, one of the storied names in Indian consumer electrical business. As per December filings, the promoters own 34.42 per cent of CG Power but around 32 per cent of that is pledged with various financial institutions. Among the non promoter group, around 37 per cent of CG Power is held as material stakes by domestic insurance and asset management companies. While mutual funds like HDFC, Birla Sun Life, Reliance Capital together own a 32 per cent block, foreign portfolio investors including ADIA and Vanguard own 11.82 per cent. The move is aimed at cleaning some of the recently reported related party issues and re-shaping the company, which otherwise has a clean track-record. “Unlike typical pledge invocations, this one is very different as the firms are becoming engaged shareholders in the firm, which was, at one point in time, was the best example of the make-in-India story,” one of the sources mentioned above said on condition of anonymity. When contacted, KKR, BOI Axa and Yes Bank did not comment. “..Invocation of pledge created on 6,76,96,248 equity shares of the Company held by Avantha Holdings Limited constituting 10.8 per cent equity share capital of the Company by Vistra ITCL (India) Limited, Debenture Trustee of Avantha Holdings Limited on behalf of Debenture holders namely BOI AXA Credit Risk Fund, KKR India Financial Services Private Limited and KKR India Debt Opportunities Fund II,” the company informed the exchanges on 10th of March. Avantha Holdings stated that though the pledge was invoked it will continue to have the right to require a re-transfer of the shares to itself upon repayment of the loans. In the event of any sale of the equity shares by Vistra ITCL (India) Limited, any amount received by them over and above the outstanding amount of the debt will be payable to Avantha Holdings Limited.