Brookfield, Kotak acquire Indian road, power projects

The total project cost at completion is estimated to be approximately INR67.5 billion ($1.02 billion), including INR29.4 billion for the six operational projects. The projects have received INR30.1 billion in capital as of March 2015 and carried INR17.2 billion in debt.

Gammon will receive INR5.63 billion in cash, and up to INR1 billion more if certain performance targets are met. The divestment will also allow the company to reduce its consolidated net debt to INR22.3 billion and improve its gearing from more than 4x to around 2x.

"The positive policy changes in the infrastructure space by the government of India in general and especially by the Ministry of Road Transport and Highway, has resulted in the revival of interest of marquee overseas investors such as Brookfield in the Indian infrastructure sector," Gammon said in a statement.

The deal also underlines the opportunity for private capital in picking up assets from infrastructure players that are under pressure to ease their debt burdens.

The power projects being sold are: Aparna Infraenergy India, a 250-megawatt coal-fired power plant in Maharashtra that is at the pre-development stage; Sikkim Hydro Power Ventures, a 66 MW run of the river hydropower project in Sikkim, currently under development; and Pravara Renewable Energy, a 30 MW co-generation project that is expected to be operational soon.

The road portfolio includes: Andhra Expressway, Rajahmundry Expressway, and Mumbai Nasik Expressway, projects to lengthen and widen highways in Andhra Pradesh and Mumbai, respectively; Kosi Bridge Infrastructure, which involves the construction of a bridge in Bihar; Gorakhpur Infrastructure, a highway construction project in Uttar Pradesh; and Vijayawada Gundugolanu Road Project, which involves the expansion of an existing highway and the construction of a bypass in Andhra Pradesh. All apart from the latter project are already operational.

"This transaction represents Brookfield's first major investment in Indian infrastructure, and provides us a great platform to participate in the Indian growth story over the long term," said Anuj Ranjan, managing partner at Brookfield.

Brookfield has more than $200 billion in assets under management globally, focusing on infrastructures, renewable energy, private equity and real estate. The Core Infrastructure India Fund reached a first close of $90 million in 2013 and has a hard cap of $250 million. LPs include Brookfield, Sumitomo Mitsui Banking Corporation and the Japan Bank for International Co-operation.

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• Topics
• Infrastructure
• Infrastructure
• Infrastructure
• South Asia
• Buyouts
• buyout
• Infrastructure
• India
• Brookfield Asset Management
• Kotak Private Equity Group
• energy
• Transportation