IL&FS completes sale of 49% stake in Chinese road company

Our Bureau Mumbai | Updated on April 01, 2021

IL&FS has completed sale of 49 per cent stake in the Chinese road asset — Chongqing Yuhe Expressway Co Ltd. 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 ₹1,035 crore ($141.3 million) as part of this stake sale transaction.

The consideration will be used to pay off loans worth $88 million to Bank of Baroda. The balance will be used to meet other liabilities, including that of bondholders.

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

PingAn had bid at an aggregate equity valuation of $281 million for 100 per cent stake. This valued the 49 per cent stake at $140 million. PingAn has agreed to take over the ₹1,600-crore debt in CYEC (as of December 2018).

CYEC holds and operates a concession for a toll-based expressway of approximately 58.72 km in China Mainland till 2032. The company has the right to collect toll from users and concessions from the Chinese Government for the remaining period of concession term.

The management and the new board of IL&FS Limited, as part of its quarterly update on the progress of ongoing Group resolution process in January, had said it has addressed about ₹32,000 crore of aggregate debt of the group.

The group maintains its estimates of addressing aggregate debt of over ₹56,000 crore by FY22, out of an overall debt of over ₹99,000 crore (as of October 2018).

Published on April 01, 2021

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