Infrastructure firms NCC Infrastructure and Soma Enterprise are selling their entire stake in Bangalore Elevated Tollway Ltd for Rs 750 crore to a fund operated by IDFC Alternatives.
The development follows a recent government decision to allow infrastructure players to exit highway projects.
The two infrastructure companies have entered into a pact with India Infrastructure Fund II, managed by IDFC Alternatives Ltd, to sell their entire stake in the Bangalore Elevated Tollway (BETL). Both the firms hold 38 per cent equity each in BETL.
"As a part of its strategic initiatives to divest the road BOT projects, NCC Infrastructure Holdings (NCCIHL) along with Soma Enterprise (Soma) has executed a share purchase agreement on February 22, 2016 with India Infrastructure Fund II, which is managed by IDFC Alternatives Ltd to sell their respective shareholdings in BETL," NCC Infrastructure said in a statement.
"The divestment entails their full exit from BETL including through sale of preference shares held and repayment of shareholder loans held by both NCCIHL and Soma in BETL," it said.
BETL is a special purpose vehicle which has developed and is currently operating 34 km road, including 10 km four-lane elevated highway project connecting Silk Board to Electronic City junction section on NH-7 in Bangalore, Karnataka.
The project is fully operational since April 2010, with a 20 years' concession period awarded by National Highways Authority of India (NHAI).
"The transaction is taking place at an enterprise value of approximately Rs 750 crore. The transaction is expected to be completed on achieving the conditions precedent agreed between the parties," the statement said.
For the financial year 2014-15, the turnover and networth contribution of BETL stood at Rs 28.42 crore (2.95 per cent) and Rs 40.93 crore (1.20 per cent) respectively.
Aditya Aggarwal, Partner at IDFC Alternatives said "Buying control in operational cash generating core assets remains our preferred investment thesis. We look forward to continuing the calibrated traction on our roads platform and having BETL as the latest in a series of disciplined acquisitions over the past couple of years."
Ernst & Young LLP (EY) acted as the exclusive sell-side M&A advisor on this transaction.
IDFC Alternatives is one of India's largest multi-asset class fund managers with assets under management of approximately USD 3.4 billion.