Sadbhav Infrastructure to monetise its assets

Sadbhav Infrastructure Project Limited (SIPL), subsidiary of Sadbhav Engineering, has entered into a definitive agreement with IndInfravitTrust for sale of the entire shareholding of SIPL in nine operational road projects at an enterprise value of Rs. 6,610 crore. Upon completion of the transaction, the company will receive Rs. 1,900 cash and 10 per cent of IndInfravit units aggregating to an equity value of Rs. 2,550 crore against equity investment of Rs. 1,500 crore.

The company's Roads Portfolio consists of seven toll roads and two annuity roads, with total 2,619 lane kms in Gujarat, Karnataka, Maharashtra, Rajasthan and Telangana, some of India’s most economically vibrant states.

The company further informed that the divestment of these nine assets will result in de-consolidation of net debt of Rs. 4,060 crore for Sadbhav Infra. Notably, the assets are valued at a strong Rs. 2,550 crore as against equity investment of Rs. 1,500 crore. The company will continue to do routine and major maintenance (Rs. 4,000 crore contracts for remaining concession period) and will get Project Management fees linked to toll collections for 9 transaction assets. This transaction will help Sadbhav Infrastructure to reduce stress on its balance sheet and free up equity capital to deploy capital for future projects.

IndInfravit is sponsored by L&T Infrastructure Development Projects Ltd.