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Thursday, April 22, 2021

IL&FS sells 49% stake in Chinese road asset CYEC

This is the largest transaction for IL&FS since the sale of its wind energy assets to Orix.

By: ENS Economic Bureau | Mumbai |
April 2, 2021 5:10:17 am
IL&FS, Chinese road asset Chongqing Yuhe Expressway Co Ltd, China Merchants & PingAn Infrastructure, business news, indian expressThe balance 51 per cent stake in CYEC is held by Chongqing Expressway Group.

INFRASTRUCTURE LEASING and Financial Services (IL&FS) on Thursday announced the completion of its 49 per cent stake sale in its Chinese road asset Chongqing Yuhe Expressway Co Ltd (CYEC). The stake has been 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.

This is the largest transaction for IL&FS since the sale of its wind energy assets to Orix.

IL&FS has received Rs 1,035 crore ($141.3 million) in Singapore as part of this stake sale transaction. The consideration will be used to pay $88 million of Bank of Baroda loans and the balance to meet IIPL liabilities — including bondholders under IOPL.

IL&FS group held 49 per cent stake in CYEC — via its step down Singapore-based subsidiary ITNL International (IIPL). The balance 51 per cent stake in CYEC is held by Chongqing Expressway Group.

PingAn had bid at an aggregate equity valuation of $281 million for 100 per cent stake. This valued IIPL’s 49 per cent stake at $140 million and PingAn had agreed to take over the Rs 1,600 crore debt in CYEC (as of December 2018). The transaction was completed post receipt of approval from former Supreme Court Justice DK Jain and the National Company Law Tribunal.

ITNL Offshore PTE Ltd (IOPL) and (IIPL) are two Singapore-based subsidiaries of IL&FS Transportation Networks Limited (ITNL), a majority owned subsidiary of IL&FS.

The management and new board of IL&FS, as part of its quarterly update on the progress of ongoing group resolution process in January, had said it has addressed Rs 32,000 crore of aggregate debt. The group has maintained its estimates of addressing aggregate debt of over Rs 56,000 crore by FY22, out of an overall debt of over Rs 99,000 crore (as of October 2018).

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