Singapore's GIC to invest up to Rs 4,400 cr in road assets of IRB Infrastructure Developers

New Delhi: Singapore’s sovereign wealth fund GIC will invest up to Rs 4,400 crore in the road assets of IRB Infrastructure Developers, according to a company statement. As part of the transaction, IRB will transfer 9 of its BOT (build, operate and transfer) assets into a private infrastructure investment trust in which IRB will hold a controlling stake of 51 percent, IRB said on Tuesday. The deal was approved by the board following which IRB has signed binding definitive agreements with GIC for a total investment of up to Rs 4,400 crore, including the funding of future construction costs. “IRB Infrastructure Developers today announced the investment by affiliates of GIC, Singapore’s sovereign wealth fund, in its road platform…The portfolio spans across 1,200 km in Haryana, Uttar Pradesh, Rajasthan and Gujarat, Maharashtra and Karnataka,” IRB said in a statement. [caption id=“attachment_6013191” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Three of these projects have recently become operational and another six are under various stages of construction. Five of the assets under construction are projects for widening of highways into four and six lanes where tolling as well as construction have already begun, the company said. These projects are strategically located along economic corridors and across tourist hubs, it said. “The proposed investment is subject to regulatory approvals, lender consents and other applicable approvals. The investment proceeds from GIC will be used for deleveraging of the portfolio, and equity funding for under-construction projects of the portfolio,” the company said. IRB will have management control over these assets with GIC having standard/ customary rights of a financial investor and corresponding board representation, it said. “The balance construction and O&M for the portfolio will be executed by IRB as the Project Manager for the Private InvIT. GIC will also hold 49 percent in the Investment Manager entity formed to manage the private trust,” it added. The net revenue of the portfolio in the financial year 2019 was Rs 630 crore, the company said adding at the completion of construction, the enterprise value of the portfolio would be Rs 22,500 crore, it said. “This investment symbolizes the confidence shown by a global institutional investor in IRB’s ability to build quality infrastructure for India. IRB and GIC plan to also explore future road sector opportunities in India together through the Private InvIT, exhibiting IRB’s strength and domain expertise as a market leader in Indian roads and highways sector,” Virendra Mhaiskar, CMD, IRB said. Bajaj Consultants acted as the exclusive financial advisor to IRB for the transaction. S&R Associates acted as legal advisor to IRB and Nishith Desai Associates acted as legal advisor to GIC. IRB is one of the largest private roads and highways infrastructure developers in India claiming to have constructed over 12,600 lane kms in two decades.