IndiGrid, the country's first infrastructure investment trust in the power sector, on January 29 announced acquisition of power transmission firm East North Interconnection Company Ltd (ENICL) for Rs 1,020 crore. ENICL is part of inter state transmission scheme network and consists of two 400 KV transmission lines with a total 900 circuit kilometers across Assam, Bihar and West Bengal, which were set up to evacuate power from north-east and eastern states to the northern region of India.
The Board of the Investment Manager of IndiGrid has approved the acquisition of ENICL at a value of Rs 1,020 crore, a company statement said.
The acquisition would increase the AUM of IndiGrid by 10 per cent to Rs 12,100 crore, it added. IndiGrid had signed an extension of Right of First Offer deed with Sterlite Power for ENICL as disclosed in the Offer Document dated May 4, 2019, the statement said.
As IndiGrid is leveraged at 45 per cent net debt/AUM, it will be able to acquire the ENICL without any dilution.
This acquisition will be funded by internal accruals, proceeds from the preference issue done in May 2019 and new debt.
The acquisition is expected to be consummated during the fourth quarter of 2019-20, subject to unitholders' approval, execution of definitive agreements and regulatory approvals.
Upon acquisition of the ENICL, the IndiGrid's net debt/AUM will continue to be below 49 per cent.
IndiGrid's portfolio will increase to nine power transmission projects with a total network of 20 power transmission lines that span more than 5,800 circuit kilometres across 13 Indian states post this acquisition.
Harsh Shah, Chief Executive Officer of IndiGrid, said, “IndiGrid has another Rs 65 billion (Rs 6500 crore) pipeline of transmission projects under the framework agreement with Sterlite Power to reach an AUM of Rs 180 billion (Rs 18,000 crore) over next two years. We are committed to growing IndiGrid with accretive acquisition of operating projects with long-term stable cash flows and low counter-party risks to achieve Rs 300 billion (Rs 30,000 crore) of AUM by 2022, while providing predictable and growing distributions to our investors.”
IndiGrid is the first infrastructure investment trust in the Indian power sector. It is managed by Sterlite Investment Managers Ltd which is majority owned by PE firm KKR.
Last May, Indigrid raised Rs 2,510 crore through preferential issue of which KKR and GIC contributed Rs 2,060 crore.