Global infrastructure investment fund I Squared Capital, the National Investment and Infrastructure Fund (NIIF), Singapore-based infrastructure investment platform Cube Highways and Edelweiss Financial Services have shown interest in buying road assets worth about Rs 20,000 crore from the Infrastructure Leasing & Financial Services (IL&FS) group, said people with knowledge of the matter.
Fourteen entities have submitted bids for 10 road assets with debt of Rs 17,700 crore, which accounts for nearly a fifth of total IL&FS group debt.
With a debt obligation of around Rs 1 lakh crore, IL&FS has 28 build-operate-transfer projects under the listed IL&FS Transportation Networks (ITNL).
“These three large funds are among a dozen that have shown interest in buying stake in road assets of IL&FS,” said one of the persons. “Funds have bid for multiple road assets put on the block.”
The road assets are in Jharkhand, Tamil Nadu (Chennai), Maharashtra (Pune), Rajasthan, West Bengal (Kharagpur), Meghalaya (Shillong) and Uttar Pradesh (Moradabad).
I Squared Capital, Edelweiss and IL&FS didn’t respond to queries. Cube could not be reached for comment.
The shock default by IL&FS in September last year triggered market turmoil and a liquidity squeeze on nonbanking finance companies (NBFCs). The government sacked the IL&FS board and put in place a new one as part of a cleanup exercise.
‘Investment in Equity Will Be Small’
IL&FS categorised the debt owed by its units into three — green for those that can pay all creditors, amber for those that can pay secured ones and red for those with no cash.
Jharkhand Infrastructure Implementation Co (JIICL) is the only asset in green, with debt of Rs 430 crore. As part of the resolution process, IL&FS has signed a binding term sheet with secured lenders of three entities —Moradabad Bareilly Expressway Ltd, Jharkhand Road Projects and West Gujarat Expressway Ltd — and moved these assets from amber to green.
Large assets include Chennai Nashri Tunnelway Ltd with debt of Rs 4,800 crore; Moradabad Bareilly Expressway Ltd (Rs 2,486 crore); Road Infrastructure Development Co of Rajasthan Ltd (Rs 2,172 crore); Jharkhand Road Projects Implementation Co Ltd (Rs 2,387 crore); Pune Sholapur Road Development Co Ltd (Rs 1,925 crore); Jorabat Shillong Expressway Ltd (Rs 1,406 crore); Hazaribagh Ranchi Expressway Ltd (Rs 954 crore debt); Baleshwar Kharagppur Expressway Ltd (Rs 614 crore); and Sikar Bikaner Highway Ltd (Rs 561 crore).
“Bidders are interested in buying individual assets and they will start due diligence soon,” said a source close to the development. “Like in the case of wind energy assets, investment in equity will be small, and a large chunk will go towards wiping out debt. The bid will include investment of Rs 2,000-3,000 crore into equity of these road assets.”
The new IL&FS board is hopeful of selling its road assets after having sold renewable energy assets. It sold the seven wind energy assets to existing partner Orix of Japan for an equity value of Rs 593 crore. Orix has also agreed to take over the entire special purpose vehicle debt of Rs 3,700 crore. The attempt to sell the securities and education businesses has not yet been effective.
Source: Economic Times