The IL&FS board on Monday decided to seek buyers for the road assets of its listed road development unit, IL&FS Transportation Networks (ITNL), as the embattled group looks at ways to pare debt of as much as ₹91,000 crore.
“In order to ascertain market interest, and to examine feasibility of maximisation of value in an orderly and transparent manner, the IL&FS board, acting on behalf of its relevant subsidiaries including ITNL, has today initiated the process of exploring the divestment of the IL&FS Group’s equity stakes in road assets or businesses or an undertaking comprising all the assets or businesses,” IL&FS said in a statement.
The 19 road projects identified for sale include seven operating annuity-based road projects in various parts of India aggregating to approximately 1,774 lane km, eight operating toll-based road projects totalling 6,572 lane km, and four road projects under construction with total length of approximately 1,736 lane km upon completion, the company said.
Largest BOT player
As of November 2017, the entire road portfolio of ITNL, one of the largest build-operate-transfer (BOT) players in India, stood at around 30 road projects, of which 23 were operational projects (eight annuity projects and 15 toll) and seven projects (two annuity and five toll) were under-construction.
IL&Fs said it will also explore divesting the EPC (engineering, procurement and construction ) and O&M (operation and maintenance) businesses of ITNL as well as a sports complex in Thiruvananthapuram. It added that the stake sale could be carried out as a basket, or individually, or as an entire undertaking comprising all the offered assets and businesses.
“Accordingly, the IL&FS board, working with the ITNL board, has decided to publicly solicit Expressions of Interest (EoI) to assess the interest for a sale of its stakes in the domestic roads vertical,” it added.
It further said that any divestment will be subject to receipt of all requisite approvals, including the NCLT or, where necessary, the high courts.
Earlier this month, in the second report submitted by IL&FS to NCLT, the infrastructure finance major noted that it was considering divesting road assets both in India and abroad as a significant majority of its various businesses in offshore jurisdictions are a part of its road arm.
ITNL has vast operations with multiple layers of subsidiaries both in India and abroad, including Spain, the US, Africa, the UAE, Singapore and China.
Operations and maintenance company Elsamex, with operations in Spain, Portugal, Latin America and Africa, acquired by ITNL in 2008, is likely to be included in the divestment plan, although it is not named directly in the latest statement. IL&FS has also been considering divesting stake in IIPL USA LLC, its O&M subsidiary in the US.