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IL&FS plans road assets InvIT, initial offer could be for up to Rs 2,500 crore

IL&FS Transportation Networks (ITNL) plans to put three or four road assets valued at between R4,500 crore and R5,000 crore in an infrastructure investment trust (InvIT).

By: | Mumbai | Published: September 15, 2016 6:57 AM
On a standalone level, ITNL expects to reduce its debt by R1,000 crore through sale of assets. The standalone debt stood at around R9,200 crore as on June 30, 2016. (Reuters) On a standalone level, ITNL expects to reduce its debt by R1,000 crore through sale of assets. The standalone debt stood at around R9,200 crore as on June 30, 2016. (Reuters)

IL&FS Transportation Networks (ITNL) plans to put three or four road assets valued at between R4,500 crore and R5,000 crore in an infrastructure investment trust (InvIT). The initial offer to the public could be for a quantum of R2,000 crore-2,500 crore, senior executives of the company have indicated.

Dilip Bhatia, chief financial officer, IL&FS Transportation Networks, told analysts on Tuesday that the company had applied for an InvIT and was awaiting an approval from the Securities and Exchange Board of India (Sebi). “While the exact details are being worked out, the initial offer to the public would be in the range of R2,000 crore-2,500 crore,” he said. The road assets placed in the InvIT would comprise a mix of toll projects and annuity projects, Bhatia said.

Bhatia said that apart from the outright sale of assets, the InvIT will also help the firm reduce debt at the consolidated level.

The company’s consolidated debt at the end of June 30, 2016 stood at over R26,600 crore. Recently, IRB Infrastructure Developers filed a draft red herring prospectus (DRHP) with the capital markets regulator to raise R4,300 crore, making it the first company to do so. Among other infrastructure players, Sterlite Power has also articulated plans for an InvIT.

On a standalone level, ITNL expects to reduce its debt by R1,000 crore through sale of assets. The standalone debt stood at around R9,200 crore as on June 30, 2016.

In August, the company signed a share purchase agreement with Cube Highways & Infrastructure Pte Ltd, backed by I Squared Capital for the sale of its entire equity stake in the 328-km Andhra Pradesh Expressway (APEL) for an aggregate value of R140.37 crore. As part of the deal, debt of R497 crore will also be taken over by Cube Highways.

FE had reported about the discussions between ITNL and I Squared Capital for the sale of APEL in its edition dated April 2, 2016.

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During the quarter, Macquarie Group, through its investment arm MAIF Investments India Pte Ltd, acquired an additional 15% stake in ITNL’s Gujarat Roads and Infrastructure project for about R110 crore, taking its holding to 56.8% in the asset. In January 2015, MAIF Investments had acquired nearly 42% stake in the road project for R650 crore. ITNL continues to holds 26.8% in the project.

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