Sadbhav Infrastructure Projects Ltd shares gained as much as 10% in intraday trade on Tuesday after the company signed definitive agreement to sell 100% equity in its nine operational road projects to IndInfravit Trust for Rs 6,610 crore.
IndInfravit Trust is the infrastructure investment trust (InvIT) floated by L&T Infrastructure Development Projects. Canadian pension fund Canada Pension Plan Investment Board (CPPIB) and Allianz Capital Partners own about 55% of the IndInfravit Trust units.
The roads portfolio offloaded by Sadbhav Infrastructure comprises seven toll roads and two annuity roads, with a total of 2,619 lane km in Gujarat, Karnataka, Maharashtra, Rajasthan and Telangana. The roads have been operational, on an average, for approximately six years, and are used by diverse groups of users and commercial traffic.
Upon completion of the transaction, Sadbhav Infrastructure will receive cash as well as allotment of up to 10% units of IndInfravit. The company, in a statement, said it will utilise the sale proceeds to recycle capital in to bidding for new road projects, inject equity in current under-construction projects and prepay debt.
Shashin Patel, chairman of Sadbhav, said: “The transaction and partnership with IndInfravit marks a significant milestone for Sadbhav Group. This is a very exciting phase in our journey and we are very committed to delivering growth and value to our shareholders, both at SIPL and SEL (Sadbhav Engineering). We look forward to our partnership with IndInfravit and its marquee set of unitholders. We are committed to continue providing quality maintenance services and project management services to the portfolio.”
After the completion of this deal, Sadbhav Infrastructure will continue to own three operational road project companies and 12 under-construction road projects under the Hybrid Annuity Model. The company said it will continue to focus on its core expertise of development of new roads.
Ambit Pvt. Ltd acted as the exclusive financial adviser to IndInfravit, while Morgan Stanley acted as the exclusive financial adviser to Sadbhav Infrastructure Projects.
At 11.09am, shares of Sadbhav Infrastructure were trading at Rs 74.80, up 5.4%.
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