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The Anil Ambani-led infrastructure company is seeking investors for its road assets as part of a strategy to divest assets, raise cash and pay down debt.
“Cube Highways has offered an enterprise value of around Rs 1,430 crore and the proceeds would result in reducing Reliance Infrastructure’s debt to that extent,” a company source told ET.
The company responded to ET’s query by mail: “The company does not comment on speculation. As stated earlier, the company has been engaged in various initiatives to become debt-free by March 2022.” Debt-ridden Reliance Infrastructure has defaulted on its loans and has been selling assets with a view to paying off debts and becoming debt-free on a stand-alone basis by March 2020, but the target has now been pushed back to 2022. The company has standalone debt of Rs 3,808 crore and consolidated debt of Rs 14,260 crore as of March.
The proposed deal would involve four operating assets of Reliance Infrastructure, namely, DS Toll Road Private, NK Toll Road Private, SU Toll Road located in Tamil Nadu and JR Toll Road Private in Rajasthan. This property consists of approximately 283 km of four-lane highways with a balance concession period of up to 12 years.
If the deal goes through, this would be the second transaction between the two companies. In January, Reliance Infrastructure completed the sale of its Delhi-Agra road project to Cube Highways and Infrastructure for an enterprise value of over Rs 3,600 crore, after announcing the deal in March 2019. Cube Highways, promoted by I Squared Capital and a wholly-owned subsidiary of the Abu Dhabi Investment Authority, did not respond to ET’s query. ADIA declined to comment.
In April, Reliance Infrastructure struck a deal with lender Yes Bank to sell its commercial property in Mumbai’s Santacruz suburb for Rs 1,200 crore and use the entire proceeds to repay the bank. Before that, in January, it completed the sale of its entire 74% stake in its power transmission joint venture with India’s Power Grid Corporation, Parbati Koldam Transmission Co, at an enterprise value of Rs 900 crore. The company also sold its Mumbai power business to Adani Transmission.
Earlier this month, Reliance Infrastructure said it would raise 550 million rupees by issuing shares and convertible warrants to Minneapolis-based fund manager Varde Investment Partners LP and entity n Reliance Group.
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