Key infrastructure and real estate deals

Author: | Published: 1 Aug 2012
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HDFC – Marvel Group

LAW FIRMS

J Sagar Associates
Marvel Group

Nishith Desai Associates
IndiaReit Domestic Fund Scheme IV

Why: India's top fund house, HDFC Asset Management Company, as portfolio manager of the country's largest real estate fund, HDFC Asset Management Company Portfolio Management Services (HDFC PMS) – Real Estate Portfolio-I, made a Rs 135 crore (US$30 million) investment, together with HDFC PMS' clients, in Pune-based property group Marvel. This was for the development of high-end luxury residential apartments in Pune. The investment was made by way of a combination of pure equity and complex structured debt instruments. This gave the investor the equity upside as well as downside protections, and structuring was also required to provide the shareholders differential returns as per the distribution waterfall.

ICICI Bank – Banihal Bypass

LAW FIRMS

Amarchand Mangaldas
ICICI Bank

Link Legal
Borrower

Why: Srinagar-Banihal Expressway Ltd (SBEL), a joint venture between Hyderabad-based infrastructure firm Ramky Infrastructure and China's Jiangshu Provincial Transportation Engineering Group, signed a Rs 1,440 crore debt facility with ICICI Bank for the construction, operation and maintenance of the prestigious Srinagar-Banihal highway project in Jammu and Kashmir. SBEL was awarded the project by the National Highways Authority of India (NHAI) for the design, build, finance, operate and transfer of the project on an annuity basis. The financing involved a letter of credit facility as a sublimit/ interchangeable limit of the rupee facility, with the total cost of the project estimated at Rs 1,625 crore.

KPHPL road financing

LAW FIRMS

DLA Piper
Lenders

Luthra & Luthra
Lenders

Why: Punj Lloyd and subsidiary Punj Lloyd Infrastructure set up SPV Khagaria Purnea Highway for the construction and development of two laning of 140 kilometres of the Khagaria-Purnea section of national highway in the State of Bihar. The SPV concluded a three-tranche loan, comprising a syndicate of senior rupee and LC lenders, senior ECB lenders and subordinated rupee lenders, on a Rs 6.16 billion syndicated secured facility. This was the first road financing where ECB has been part of the original financing package and forms part of the primary syndication. And it is one of few deals where ECB has been refinanced by rupee obligations and which includes a unique flexible repayment schedule.

Lanco Infratech – Griffin Coal

LAW FIRMS

Allen & Overy
Lanco Infratech

Baker & McKenzie
Administrators

Corrs Chambers Westgarth
Target

Maddocks
Griffin Coal

Shook Lin & Bok
Arrangers

Trilegal
Lanco Infratech

Why: Hyderabad-based infrastructure company Lanco Infratech acquired the coal mines of failed Griffin Coal in WA for US$750 million (Rs 3,400 crore). This was the second largest investment in Australia by an Indian company following Adani Enterprises' acquisition of Linc Energy in 2010. The funding was done in three installments: an upfront cost of A$480 million by ICICI Bank; a second payout of A$100 million; and, A$150 million in four years. The coal mine assets had attracted bids from the likes of Adani Power and GMR and Reliance Power in India, as well as from interested parties in Australia and China. Griffin Coal sought bankruptcy protection in January 2011 after defaulting on US$475 million in bonds.

Leighton – Welspun

LAW FIRM

Khaitan & Co
Seller and target

Why: Leading Indian engineering procurement and construction (EPC) contractor Leighton Contractors (India) entered into a strategic partnership with US$3 billion Welspun Group infrastructure developer Welspun Infra Projects to form EPC company Leighton Welspun. This was a rare occasion where a multinational company in the global infrastructure space (Australian listed company Leighton Group) offered shares in its step down Indian subsidiary for purchase by an Indian company. It has been heralded as a marquee deal in the Indian EPC space as it will allow Welspun and Leighton to bid competitively for upcoming infrastructure work.

MSI – Isolux Corsán Concesiones JV

LAW FIRMS

Allen & Overy
Morgan Stanley Infrastructure Partners

Amarchand Mangaldas
Morgan Stanley Infrastructure Partners

AZB & Partners
Grupo Isolux Corsán

Davis Polk & Wardwell
Morgan Stanley Infrastructure Partners

De Brauw Blackstone Westbroek
Grupo Isolux Corsán

Garrigues
Morgan Stanley Infrastructure Partners

Uría Menéndez
Grupo Isolux Corsán

Why: Morgan Stanley Infrastructure Partners (MSI) and Spanish engineering, construction, and concessions company Grupo Isolux Corsán invested up to US$400 million in a new JV between MSI and Isolux Corsán Concesiones, a large-scale infrastructure concessions subsidiary of Grupo Isolux Corsán. The investment was structured through multiple jurisdictions, each involving complex legal issues, and included a number of innovative governance, liquidity and earn-out features. It will be phased over a number of years based on the achievement of financing and project milestones, each of which needed to be provided for in the documentation. The JV is constructing three highway projects in India under long-term concession agreements awarded by the NHAI.

Mytrah Energy – Suzlon Energy

LAW FIRMS

Link Legal
Suzlon Energy

Trilegal
Mytrah Energy

Why: Mytrah Energy (formerly known as Caparo Energy) entered into a framework arrangement with turbine manufacturer Suzlon Energy for developing wind power projects across India in phases with an aggregate capacity of 1,000 MW. With this deal, the concept of executing 'framework agreements' for developing renewable energy projects across India over a period of time was introduced. The deal structure involved aligning the popular turn-key project development contact model with the 'framework arrangement', which encompasses projects of different capacities in different states to be developed over a much longer timeframe than standard in other development and construction contracts.

Omkar – IndiaReit

LAW FIRMS

Kanga & Co
Indian counsel

Nishith Desai Associates
IndiaReit Domestic Fund Scheme IV

Wadia Ghandy & Co
Omkar Developers

Why: IndiaReit Funds Advisors invested Rs 200 crore by way of subscription to equity and structured debt instruments in Omkar Realtors & Developers' mixed-use slum rehabilitation project at Worli in Mumbai. The investment was structured through a complex 'tracking stock' instrument, whereby the instruments issued to the investor tracked the value of only that particular project of Omkar. All distributions to the investor are serviced out of cash flows emanating only from this project, meaning that the fund receives a 100% return in the next four years upon project completion. This is the first PE investment into any slum rehabilitation related project in Mumbai.

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