CPPIB-led InvIT to acquire Sadbhav Infra’s 9 road assets

Economy


MUMBAI: IndInfravit Trust, the infrastructure investment trust (InvIT) floated by L&T Infrastructure Development Projects, will acquire nine operational road assets of Sadbhav Infrastructure Project Limited (SIPL). The transaction values 100% of the roads portfolio of SIPL at an enterprise value of Rs.6610 crore, said a company statement.

Canadian pension fund Canada Pension Plan Investment Board (CPPIB) and Allianz Capital Partners own about 55 per cent of the IndInfravit Trust units.

Canada’s largest pension fund manager CPPIB is in advanced talks to acquire operating road assets of Sadbhav Infrastructure Project Ltd (SIPL), through the InvIT floated by L&T Infrastructure, ET first reported on 11 March.

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The roads portfolio which is acquired by InvIT comprises seven toll roads and two annuity roads, with total 2,619 lane kms in Gujarat, Karnataka, Maharashtra, Rajasthan and Telangana.

Listed Sadbhav Engineering Ltd holds about 69 per cent of SIPL, which is involved in the development, operation and maintenance of national and state highways and roads across the country. SIPL has a portfolio of 24 Roads & Highways buildoperate-transfer (BOT) and Hybrid Annuity Mode (HAM) projects of which 12 projects are fully operational with total lane kms of 3338.

Post the completion of this transaction, SIPL will continue to own three operational road project companies and 12 under-construction road projects under the Hybrid Annuity Model.

SIPL will continue to focus on its core expertise of development of new roads and utilise the sale proceeds from this transaction to recycle capital in to bidding for new road projects, inject equity in current under-construction projects and prepay debt, the statement added. Upon completion of the transaction, SIPL will receive cash as well as allotment of units of IndInfravit and will hold not exceeding 10% unitholding in IndInfravit.

In November, SIPL had received a debt financing worth Rs 600 crore to complete the underlying road projects from Ajay Piramal-led Piramal Group. As the only listed road and highways BOT company in India, SIPL had raised Rs 492 crore through listing on BSE and NSE in September 2015.

In May 2018, CPPIB and German insurer Allianz Group had acquired a combined 55% in India’s first private infrastructure investment trust, where CPPIB invested approximately $156 million for 30% of units in IndInfravit Trust (IndInfravit) while Allianz Capital Partners acquired 25% stake. L&T Infrastructure Development Projects Limited (L&T IDPL), the trust sponsor, holds 15% stake.

OMERS Infrastructure Management, another leading Canadian pension fund had acquired a 22.4% interest in the IndInfravit for Rs 870 crore ($122 million) in February.



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