Debt-laden Infrastructure Leasing and Financial Services (IL&FS) on Thursday announced completion of 49% stake sale in its Chinese road asset – Chongqing Yuhe Expressway Co Ltd (CYEC).
The stake is sold to China Merchants & PingAn Infrastructure Phase 1 Equity Investment Fund (Tianjin) Co Ltd (PingAn), a fund jointly owned by PingAn Insurance and China Merchants, a release from IL&FS Group said.
The transaction will help the group address ₹2,600 crore of its overall debt of close to ₹99,000 crore (as of October 2018).
The group, through its step-down Singapore-based subsidiary, ITNL International Pte Ltd (IIPL), was holding 49% stake in CYEC. The balance 51% stake in CYEC is held by Chongqing Expressway Group (CEG).
“IL&FS has duly received ₹1,035 crore ($141.3 million) in Singapore as part of this stake sale transaction,” the group said in the release. The amount will be used to pay around $88 million of Bank of Baroda loans and the balance to meet IIPL liabilities – including bondholders under ITNL Offshore PTE Ltd (IOPL), it said.
The group said PingAn had bid at an aggregate equity valuation of $281 million for 100% stake. “This values IIPL’s 49% stake at around $140 million and PIngAn has agreed to take over the ₹1,600 crore debt in CYEC (as of December 2018),” it said.
The transaction was completed post receipt of approval from (Retd) Supreme Court Justice DK Jain, who is overseeing the resolution process of the group, and National Company Law Tribunal (NCLT).
CYEC holds and operates a concession for a toll-based expressway of approximately 58.72 km in China Mainland till 2032. The company has the right to collect toll from users and concessions from Chinese Government for the remaining period of the concession term.