"Reliance Infrastructure has signed a definitive binding agreement with Cube Highways and Infrastructure III for the sale of its 100% stake in Delhi-Agra (DA) Toll Road. Cube Highways and Infrastructure III is a Singapore-based company formed by global infrastructure fund – I Squared Capital and a wholly-owned subsidiary of the Abu Dhabi Investment Authority," the company said in its statment.
In its release, the company pegged the deal enterprise value at Rs 3600 crore. " NHAI claims of Rs. 1,200 crore to be filed by DA Toll Road will flow directly to Reliance Infrastructure," the statement said.
The road developer is expected to utilise proceeds from this sale to reduce its debt. " After the completion of the transaction for Delhi-Agra Toll Road, the debt of Reliance Infrastructure will reduce by 25 percent to only less than Rs. 5,000 crore," R Infra said in its statement.
Reliance Infrastructure has a road portfolio of around 11 road assets, including the Delhi Agra project. The company has been on the look out to divest from this portfolio for the last two years time. In the past, options like Infrastructure Investment Trusts were also considered to monetise these assets, but failed.
"The transaction is in line with Reliance Infrastructure’s strategic plan of monetizing non-core business and focus on major growth areas like engineering & construction (E&C) business. The transaction is subject to all requisite permissions and approvals," the company said in its statement.
Delhi Agra Toll Road, is a special purpose vehicle, which operates the 180-km long six-lane road that connects the two cities Delhi with Agra on National Highway (NH) 2." The profitable project has witnessed impressive revenue growth of 25% in financial year 2018," R Infra said in its statement. .Toll collection on this stretch started in October 2012 and the project has a concession period of upto 2038.
In August 2018, part of its asset monetisation strategy, Reliance Infrastructure also divested from its Mumbai power distribution business through a sale to Adani Transmission for more than Rs 13251 crore, of which business was valued at Rs 12101 crore and regulatory assets approved was at Rs 1150 crore.