IL&FS arm starts process to sell road project in China

A step-down unit of Infrastructure Leasing & Financial Services Ltd (IL&FS) has started a process to sell its 49% stake in a Chinese road asset, as the infrastructure financier and developer moves forward on its asset-sale plan to pare debt.

ITNL International Pte Ltd invited expressions of interest from potential investors for its stake in in Chongqing Yuhe Expressway Company Ltd, it said in a press release.

Singapore-incorporated ITNL International is a wholly owned subsidiary of IL&FS Transportation Networks Ltd, which is, in turn, a subsidiary of IL&FS.

Chongqing Yuhe holds a concession for a toll-based expressway of about 58.72 km in mainland China. It has the right to collect toll from users and subsidies from the Chinese government. About 13.25 years of the term of the concession remain as of March-end.

ITNL International has engaged UBS AG to assist in the potential transaction.

IL&FS is selling assets as part of a restructuring after the company and its units started defaulting on their debts last year. The defaults triggered concerns about risk in the country’s financial system and led to the Indian government taking control of IL&FS in October. IL&FS and units owed Rs 99,354 crore at the end of September 2018.

Earlier this week, IL&FS said state-run GAIL (India) Ltd had emerged as the highest bidder to buy seven of its operating wind energy assets for about Rs 4,800 crore ($689 million).

IL&FS has been looking to sell its private equity and education businesses, its road projects and its real estate properties, among other assets. In January, it had said that it had received more than 30 expressions of interest from a mix of strategic and financial players for IL&FS Transportation’s domestic road business.

The IL&FS board has hired Arpwood Capital and JM Financial as the financial and transaction advisers, and Alvarez & Marsal as the bankruptcy resolution consultant.

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