Reliance Infrastructure has initiated talks with Singapore-based Cube Highways to monetise four of its road assets and bring down debt by ₹1,430 crore.
Cube Highways is promoted by I Squared Capital, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, International Finance Corporation and a consortium of Japanese investors including Mitsubishi Corporation and Japan Overseas Infrastructure Investment Corporation for Transport.
Reliance Infra will put four of its road assets — DS Toll Road, NK Toll Road, SU Toll Road in Tamil Nadu and JR Toll Road in Rajasthan — on the block.
With a total length of 283 km, all four road assets are under operation with the balance available concession period of up to 12 years. Cube Highways has offered an enterprise value of ₹1,430 crore and the proceeds would result in the company’s debt reduction to that extent, sources said.
In January, Reliance Infra sold its entire DA Toll Road (Delhi-Agra) to Cube Highways and Infrastructure III Pte Ltd for ₹3,600 crore.
The deal was announced in March, 2019 with the signing of a definitive binding agreement between Reliance Infrastructure and Cube Highways and Infrastructure III Pte Ltd but was completed almost two years later. The entire sale proceeds was used for reducing debt by 20 per cent.
Fund raising
Recently, the company announced a fund raising of ₹550 crore from the promoter group and VSFI Holding Pte Ltd – an affiliate of Varde Investment Partners, LLP.
The funds raised would be utilised for long term resources, for general corporate purposes, fund future growth and also to reduce debt.
The company’s consolidated debt was ₹14,260 crore and standalone debt was ₹3,808 crore as of March-end. It aims to be debt free on standalone basis by the end of March, 2022.
In April, RInfra sold Reliance Centre in Mumbai to YES Bank for ₹1,200 crore. The entire proceeds from the sale of Reliance Centre was used to repay the debt of YES Bank, said RInfra.
Reliance Infra has an EPC order book of over ₹25,000 crore, power distribution business in Delhi serving 45 lakh customer and defence manufacturing business. In 20 years, the company has executed projects worth over ₹2 lakh crore.