Investment Update

RNS Number : 0407I

Infrastructure India plc

08 June 2011

 



8 June 2011

Infrastructure India plc

("IIP", or together with its subsidiaries, the "Group")

Status of acquisition of a 62.6 per cent. interest in Vikram Logistic & Maritime Services Private Limited ("VLMS")

and

Commencement of full tolling operations on the Lebad-Jaora highway

The board of IIP wishes to provide an update on both the status of the acquisition of further shares in VLMS and the achievement of a key milestone for the Lebad-Jaora highway.

On 3 March 2011 IIP announced that it had completed the acquisition of a 37.39 per cent. interest in VLMS, an Indian transportation and container infrastructure company. The board of IIP is pleased to confirm that VLMS continues to progress in line with management's expectations and provides investors with direct exposure to transportation and container infrastructure as part of IIP's portfolio of infrastructure assets.

At the time IIP's investment in VLMS completed it was also announced that IIP had agreed to acquire the outstanding balance of VLMS shares which it did not own (the "Acquisition"). The Acquisition was subject to, inter alia, obtaining certain Indian regulatory approvals, including the approval of the Foreign Investment Promotion Board (the "FIPB"). By way of a press release dated 6 June 2011, the FIPB has announced that it has not approved the Acquisition. No reasons for this decision have been given at this time. The board of IIP will consider all available options in light of this development, including a request for the FIPB to reconsider.

Separately, IIP is pleased to announce a significant step in the development of its investment in the Lebad-Jaora toll road.  On 4 June 2011, the toll road became fully operational with tolling along the entire Lebad-Jaora highway.

On 30 September 2008, the Group invested approximately GBP11.3 million (Rs 960 million) into the toll road development project in central India, for a holding of 26 per cent.  Investing directly into the SPV, Western M P Infrastructure & Toll Roads Limited ("WMPITRL"), IIP has board representation at WMPITRL and has been actively engaged in the development of this asset, especially recently in relation to the work required to complete the highway described below.

As at midnight on 4 June 2011, full commercial tolling began along the entire length of the toll road.  The road is a 125km, high quality, four lane highway which replaced the previous single carriageway road, resulting in reduced congestion on the route and a resultant decrease of journey times.  WMPITRL was awarded the concession on a Design-Build-Finance-Operate-Transfer basis in August 2007 for a term of 25 years, commencing from April 2008.

The commencement of operations at the project has been staged; the first half of the road began tolling in November 2009 (some five months ahead of schedule).  The final phase, which has just commenced tolling, required certain variations to the original project specifications relating to works on three bridges over railways, which are now fully complete. The commencement of full operations (i.e. 4 June 2011) has begun under a provisional permit, with the final permit expected in approximately 90 days.

Commenting on the commencement of operations at IIP's toll road asset, Sonny Lulla, Chief Executive of IIP, said:

"The Board is pleased both with the progress of VLMS and that IIP is now entering the next phase of its development by making the transition from a portfolio of development assets to a portfolio of both operational and development assets.  The transportation and logistics sector in India remains an important area for IIP, and the successful implementation of tolling along the entire Lebad-Jaora toll road is a significant step.  The Group is currently reviewing several investment/acquisition proposals and is in active negotiations in respect of two of such proposals."

-Ends-

Enquiries:

Infrastructure India plc
Sonny Lulla, Chief Executive	[phone]
Smith & Williamson Corporate Finance Limited	[phone]
Nominated Adviser & Joint Broker
Azhic Basirov / Siobhan Sergeant
Westhouse Securities Limited	[phone]
Joint Broker
Alastair Moreton / Hannah Young
Redleaf Polhill	[phone]
Financial PR Adviser	[e-mail]
Emma Kane / Henry Columbine / Samantha Robbins

 

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