CDPQ may buy five road projects from Ashoka Concessions

livemint.com:

NEW DELHI : Canadian pension fund CDPQ is in exclusive negotiations to acquire five operational road projects from Ashoka Concessions Ltd, a subsidiary of infrastructure company Ashoka Buildcon. The deal has potential equity and enterprise values of around $325 million and $700 million, respectively, two people aware of the talks said. On 12 December, The Economic Times reported that CDPQ (Caisse de dépôt et placement du Québec) and private-equity firm Actis Llp were in final discussions to acquire the BOT toll road assets of Ashoka Concessions.

Now, Actis is no longer in the race. “CDPQ is in exclusive negotiation with Ashoka Concessions for its five BOT road projects," one of the two people said on the condition of anonymity. BOT is short for build, operate, transfer, and is a public-private partnership model for delivery of large infrastructure projects.

The investment and banking advisory arm of EY is running the sales process for these road assets, which are expected to be brought under Indian Highway Concessions Trust (IHCT), an infrastructure investment trust (InvIT) sponsored by CDPQ-backed India-focused road-investment platform Maple Highways. InvITs manage income-generating infrastructure assets, typically offering investors a regular yield and a liquid method of investing in infrastructure projects. Ashoka Buildcon has a 61% stake in Ashoka Concessions.

The balance is held by Macquarie Infrastructure and Real Assets (MIRA). In 2012, Macquarie purchased a stake in Ashoka Concessions through its first India-focused fund along with State Bank of India (SBI) for ₹800 crore. The proposed deal will also provide an exit to Macquarie-SBI Infrastructure Fund.