International Finance Corporation (IFC), the private sector investment arm of the World Bank, plans to provide an equity investment of up to $90 million in an unnamed Singapore-based holding company of global infrastructure-focused investment firm I Squared Capital, to acquire operating road assets in India.
IFC will also consider providing refinancing for the debt availed by the road assets to be acquired by the firm. Its total debt investment is expected to be up to $150 million.
The firm may also acquire other transportation and logistics assets like parking facilities, logistics infrastructure, and other such assets.
The Singapore-based firm is being set up by I Squared Asia Advisors Pte. Ltd, which is a part of I Squared Capital (ISQ). ISQ is an independent global infrastructure investment manager focusing on energy, utilities and transport in North America, Europe, and select high growth economies.
ISQ has a presence in New York, Houston, London, New Delhi, Singapore and Hong Kong.
It is currently in advanced stages of evaluating multiple operational toll roads to be acquired through the Singapore-based holding arm.
IFC, a fairly active investor through both equity and debt side transactions in India, had most recently announced to provide Rs 450 crore ($75 million) to Clearwater India Ltd (CIL) and Rs 60 crore ($9.7 million) to (ABCSPL).
It also committed to provide Rs 201.9 crore ($34 million) to ACME Solar Energy Pvt Ltd, part of the ACME Group, for its Rajasthan project and $50 million for Everstone Capital's proposed private equity fund.
This transaction with ISQ would be one of its single biggest financial commitment to one firm. However, some of the investment, especially the debt side, is contingent on requirements and would come in tranches.
The quantum is next only to its $250 million commitment to an arm of India’s largest paper company Ballarpur Industries Ltd (Bilt). Early this year IFC said it may invest in a Dutch subsidiary of Bilt, Ballarpur International Graphic Paper Holdings (BIGPH).
IFC said it may invest up to $100 million in equity, ‘A’ loan of up to $50 million and a ‘B’ loan/parallel loan of up to $100 million. This would comprise over half of the total project cost of BIGPH, estimated at $472 million and would make it one of the single biggest bets of IFC.