New Delhi: IRB Infrastructure Developers Limited (“IRB”) today announced two equity fundraises through preferential allotments to (a) Cintra INR Investments BV (“Cintra”), a 100% subsidiary of Cintra Global S.E. and (b) Bricklayers Investment Pte. Ltd, an affiliate of GIC (“GIC”), Singapore’s sovereign wealth fund.
Cintra Global S.E., a 100% subsidiary of global infrastructure giant Ferrovial S.A (“Ferrovial”), through its subsidiary Cintra would invest equity capital of up to INR 3,180 Cr into India’s largest toll road developer – IRB; Cintra will have a maximum stake of 24.9% stake in IRB post their investment.
GIC (through its affiliate), would invest equity capital of up to INR 2,167 Cr into IRB for a maximum stake of up to 16.9% stake in IRB post their investment.
The total investment proceeds to IRB from these investments will be a maximum of INR 5,347 Cr. The issue price for both the preferential allotments is INR 211.79 per share.
Mr. Virendra D. Mhaiskar, the Founder Promoter of IRB will continue as the promoter and single largest shareholder post completion of the transactions with an approximate 34.0% stake and will retain management control of IRB.
These equity fund raises will help achieve the twin objectives of Deleveraging and Access to Growth Capital to participate in the massive infrastructure development and monetization plan of the Govt. of India.
IRB’s execution capabilities, Cintra’s global best practices and technical prowess coupled with GIC backing as a long-term investor will be a launch pad for IRB to capture unprecedented growth in a capital efficient manner.
The two transactions are subject to execution of definitive documents, approval of IRB Shareholders, receipt of regulatory and lenders approvals and satisfaction of customary condition precedents.
Indicative Use of Proceeds from the Investment
· Deleveraging of the Corporate Level Debt – c. INR 3,250 Cr
· Growth Capital for Current and Future Opportunities – Max INR 1,497 Cr
· General Corporate Purposes – c. INR 600 Cr
Post Transaction Shareholding
Post the conclusion of the two transactions and maximum investment of INR 5,347 Cr. the shareholding pattern of IRB will be as below:
Mr. Virendra D. Mhaiskar and affiliates (Promoter) – c. 34.0%, Other Public Shareholders – c.66.0%
In the eventuality that IRB is unable to issue shares to both investors concurrently (including due to timing of receipt of regulatory approvals of either investor being longer than the regulatory approvals for the other investor), the total investment would get reduced to INR 4,307 Cr – 4,462 Cr. The exact quantum will depend on which investor transaction is completed earlier.
Commenting on the occasion, Mr. Virendra Mhaiskar, CMD – IRB Infrastructure Developers Ltd. said “We are delighted to welcome Ferrovial through its subsidiary – Cintra into the IRB Family. Through this investment, IRB will deeply benefit in terms of their global experience and best practices in the development, investment, and operation of toll road projects. We deeply value the existing relationship with GIC. This new investment by GIC is a further stamp of approval of their confidence on the robust business model of IRB. The strategy we initiated in 2017 by sponsoring the first Public InvIT provided IRB a platform for recurrent capital recycling. This strategy was further strengthened in 2019 by sponsoring the Private InvIT, which enhanced the business model by getting a recurrent investor for reducing equity commitments thus increasing the ability to take in more projects at one time. The current transaction which addresses the twin objectives of deleveraging the holdco debt and providing growth capital is the final step in optimizing the capital structure, unleashing the free cash flow generation for growth, thus creating immense shareholder value.”
Commenting on the occasion, Mr. Andres Sacristan, CEO – Cintra said “This investment in IRB Infrastructure Developers represents a great opportunity for Cintra to expand into a new market for us — India — that has very promising fundamentals for toll road development. IRB has a portfolio of high-quality assets and a platform with the capability to capture some of the strong growth expected in this sector. Cintra would work with IRB to enhance its competitive position in the Indian market. Our international experience as an investor and operator would optimize IRB’s operational capacity and ESG compliance, a field in which Cintra and Ferrovial are international leaders”
Commenting on the occasion, Mr. Eng Seng Ang, CIO – Infrastructure at GIC said “Our investment in IRB, a leader in Indian road infrastructure, will enable the company to develop and operate a greater network of roads and further enhance the infrastructure in India. As a long-term global investor, we see India as a key market, given its strong economic fundamentals and infrastructure development potential.”
Avener Capital Private Limited acted as the exclusive financial advisor to IRB for the transaction. S&R Associates acted as a legal advisor to IRB.