PNC Infratech To Sell Road Assets To Highways Infrastructure Trust For Rs 9,006 Crore

PNC Infratech Ltd. will sell its road assets to KKR and Co.-backed InvIT Highways Infrastructure Trust for an enterprise value of Rs 9,005.7 crore, in one of the largest acquisitions in the highways sector.

The company and its arm, PNC Infra Holdings, have executed definitive agreements to divest 12 of its road assets and one state highway toll road concession, according to an exchange filing issued on Monday.

The portfolio comprises 11 National Highway Hybrid Annuity Mode assets and the toll booth, with approximately 3,800 lane km in the states of Uttar Pradesh, Madhya Pradesh, Karnataka and Rajasthan.

Of the 12 projects, 10 are currently operational and the remaining two are under construction and will be acquired after the commencement of operations.

The enterprise value of the transaction is Rs 9,005.7 crore, together with the earn-outs, and is subject to any adjustments as stipulated in the definitive agreements, translating to an equity value of Rs 2,902 crore (including cash) on invested equity of Rs 1,740 crore. The acquisition will happen in one or more tranches.

The divestment is aligned with the company’s strategic objective of recycling the capital invested in operating road assets, PNC Infratech said in a statement.

"The transaction demonstrates the continued investor interest in the sector for high-quality portfolios," Managing Director Yogesh Jain said.

"This transaction would help us further strengthen our strong balance sheet and would give us a large headroom to continue pursuing our growth ambitions," he said.

"The transaction is one of the largest acquisitions in the highways sector," said Gaurav Chandna, head of strategic finance at Highway Concessions One.

The deal will require approval from the National Highways Authority of India in connection with all special purpose vehicles and from the Uttar Pradesh State Highways Authority for the toll asset, along with approval from lenders and other corporate authorities.

Highways Infrastructure Trust's current portfolio comprises 10 assets with a total length of around 628 km across six states of India.