Infrastructure Fund of IDFC for Rs 222 crore
In line with GMR Group’s Asset Right and Asset Light Strategy, GMR Highways Ltd has signed a definitive agreement with India Infrastructure Fund (IIF) to divest 74% stake in GMR Ulundurpet Expressways Private Limited (‘GUEL’). The transaction is subject to closing conditions customary to such transactions.
IIF emerged as successful bidder in buying majority stake in GUEL, which attracted strong interest from several major investors from India and abroad. This is a second major divestment in GMR’s roads portfolio in less than 6 months.
GUEL operates the highway stretch of about 73 km, from Tindivanam to Ulundurpet on National Highway 45 in the state of Tamil Nadu. The project commenced commercial operations in July 2009. GMR Group will receive a consideration of about Rs. 222 crores for the sale of 74% equity stake.
IIF, which is one of the largest infrastructure focused funds, has a well-diversified portfolio with existing investments in roads, ports, conventional and cleantech energy assets. IIF has investments in several infrastructure entities that operate in the aggregate, over 1,878 lane km of roads in India and this investment will further expand its existing roads portfolio.
Madhu Terdal, Group CFO of GMR Group said “This transaction signifies GMR Group’s ability to successfully implement its “Asset-Light-Asset-Right” strategy under challenging market conditions. We at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets. Divestment of this asset will also reduce the debt as on August 31, 2013, by about Rs.459 crores on a fully consolidated basis, in addition to infusing equity funds of Rs.222 crores. The GMR Group will continue to focus in adopting this approach in other Businesses as well. This partnership will also strengthen the relationship with IDFC.
M. K. Sinha, Managing Partner and CEO of IDFC Alternatives said “This investment is our first major acquisition and a step in the direction of implementing our road sector strategy of acquiring control of operational projects with proven traffic history.
Given the uncertainty and delays in implementing under construction projects, we will continue our focus on acquisition of operating road assets. This investment also reinforces our desire to stick to partners with whom IDFC has proven and long standing relationships like the GMR Group and we look forward to continue working with GMR in building and operating quality infrastructure assets in India”.
In line with GMR Group’s Asset Right and Asset Light Strategy, GMR Highways Ltd has signed a definitive agreement with India Infrastructure Fund (IIF) to divest 74% stake in GMR Ulundurpet Expressways Private Limited (‘GUEL’). The transaction is subject to closing conditions customary to such transactions.
IIF emerged as successful bidder in buying majority stake in GUEL, which attracted strong interest from several major investors from India and abroad. This is a second major divestment in GMR’s roads portfolio in less than 6 months.
GUEL operates the highway stretch of about 73 km, from Tindivanam to Ulundurpet on National Highway 45 in the state of Tamil Nadu. The project commenced commercial operations in July 2009. GMR Group will receive a consideration of about Rs. 222 crores for the sale of 74% equity stake.
IIF, which is one of the largest infrastructure focused funds, has a well-diversified portfolio with existing investments in roads, ports, conventional and cleantech energy assets. IIF has investments in several infrastructure entities that operate in the aggregate, over 1,878 lane km of roads in India and this investment will further expand its existing roads portfolio.
Madhu Terdal, Group CFO of GMR Group said “This transaction signifies GMR Group’s ability to successfully implement its “Asset-Light-Asset-Right” strategy under challenging market conditions. We at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets. Divestment of this asset will also reduce the debt as on August 31, 2013, by about Rs.459 crores on a fully consolidated basis, in addition to infusing equity funds of Rs.222 crores. The GMR Group will continue to focus in adopting this approach in other Businesses as well. This partnership will also strengthen the relationship with IDFC.
M. K. Sinha, Managing Partner and CEO of IDFC Alternatives said “This investment is our first major acquisition and a step in the direction of implementing our road sector strategy of acquiring control of operational projects with proven traffic history.
Given the uncertainty and delays in implementing under construction projects, we will continue our focus on acquisition of operating road assets. This investment also reinforces our desire to stick to partners with whom IDFC has proven and long standing relationships like the GMR Group and we look forward to continue working with GMR in building and operating quality infrastructure assets in India”.
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