Canada Pension Plan Investment Board (CPP Investments), the largest pension money manager in Canada, has agreed to buy a portfolio of Indian road assets from Brookfield in a deal valued at around Rs 9,300 crore ($1.2 billion), pegged as one of the largest road infrastructure transactions in the country.
The acquisition will be through the IndInfravit Trust, an infrastructure investment trust (InvIT) led by CPP Investments. IndInfravit has entered into an agreement with investment holdings of Brookfield — BIF India Holdings Pte Ltd and Kinetic Holdings 1 Pte Ltd — to buy the entire equity shareholding of five operational road projects from Brookfield, it said in a press statement on Friday.
Canadian asset manager Brookfield is finalising sale of its roads portfolio in India to IndInfravit Trust for an enterprise valuation of Rs 9,000-9,500 crore, ET first reported on April 11. The deal values the equity of the five operational road assets that Brookfield owns through platform Peak Infrastructure at around Rs 6,000 crore. The business also has debt of Rs 3,000-3,200 crore, ET had reported.
Omers and German insurer Allianz are the other key shareholders of the IndInfravit Trust along with L&T Infrastructure Development Projects (L&T IDPL), which also acts as sponsor of the vehicle. The portfolio comprises three toll roads and two annuity roads, with approximately 2,400 lane km in Andhra Pradesh, Bihar, Maharashtra and Uttar Pradesh. The roads portfolio has been operational for about nine years and residual concession period of 20 years on average.
IndInfravit currently holds a portfolio of 13 operational road concessions with about 5,000 lane km in five states. This acquisition will expand the portfolio into three additional states — Andhra Pradesh, Bihar and Uttar Pradesh. “We remain a committed supporter of IndInfravit – a portfolio that encompasses significant and critical roads assets,” said Scott Lawrence, managing director and head of infrastructure, CPP Investments.
“This acquisition provides growth and geographic diversity to the InvIT and will ensure the continued delivery of high-quality infrastructure to different regions across India,” said Delphine Voeltzel, managing director, Asia, Omers Infrastructure. “Increasing our interests in Indian infrastructure is part of our ongoing commitment to deliver solid long-term, risk-adjusted returns to CPP contributors and beneficiaries.”
Andrew Cox, co-head, infrastructure, Allianz Capital Partners, said, “Our investment in IndInfravit gives us an opportunity to be part of the vibrant and highly crucial infrastructure sector in India. We look forward to working jointly with our partners on the further development of the IndInfravit platform creating a high-quality, well-diversified asset portfolio.”
Brookfield entered the road sector in India in 2015 after buying the assets of
. It then acquired road assets from Hyderabad-based KMC Constructions. Peak handed back two projects acquired from Gammon — Andhra Expressway and Rajahmundry Expressway — to the National Highways Authority of India (NHAI) after managing them.
ET first reported on September 6 last year that Brookfield was planning to sell Peak for $1.2 billion in enterprise value. KPMG is advising Brookfield on the sale process. Ambit, Cyril Amarchand Mangaldas advised IndInfravit.
