Private equity firm AMP Capital has agreed to sell its entire 29.41 per cent stake in Gayatri Infra Ventures Ltd to Hyderabad-based partner Gayatri Projects Ltd for about Rs 43.4 crore ($6.5 million) in cash, according to a stock market disclosure.
The PE fund had, in 2008, agreed to invest Rs 200 crore in road construction company Gayatri Infra in two tranches from its $750 million Asia Giants Infrastructure fund.
While it invested Rs 100 crore by subscribing to 520,833 shares at Rs 1,930 each through a preferential allotment in August 2008, it did not invest the remaining.
AMP Capital is now selling 520,833 shares at Rs 833.25 apiece, incurring a loss on its seven-year-old investment.
An email to AMP Capital seeking information on the development did not elicit any response by the time of filing this article. A spokesperson for Gayatri Projects said that though AMP Capital had opted to invest in the road construction unit, it was not a firm agreement and that the fund size or market conditions may not have allowed AMP Capital to invest further in Gayatri Infra.
“Any investment in equity is subject to market risks,” the spokesperson said, adding that there is every chance an investor can go back if an option is available.
Gayatri Projects, which currently owns 70.59 per cent of Gayatri Infra, said in the disclosure the move is part of its efforts to restructure and monetize its road assets portfolio. "The buyout will improve the restructuring flexibility by relaxing the restriction currently imposed by shareholders’ agreement with AMP,” it said.
The transaction will happen in three tranches, which the company expects to complete within two months from the date of approval by the shareholders.
Incorporated in January 2008, Gayatri Infra has a portfolio of eight projects on build-operate-transfer basis, according to information available on its website. All the projects have achieved financial closure.
Gayatri Projects is involved in civil works projects including construction of dams, highways, bridges, airports and ports, among others.
Founded in 1993, Sydney-based AMP Capital Investors invested in the Asian infrastructure sector through its Asian Giants Infrastructure Fund. The firm also invests in public equity, fixed income, alternative and property markets across the globe with focus on Australia.
Lately, the PE firm has not been active in India. It last put in money in an Indian company in 2013 when it invested $30.25 million in Shalivahana Green Energy from its Asian Giants Infrastructure Fund. This fund also invested in Jet Airways and Wireless TT Info Services Ltd, among others.