IL&FS Transportation board approves setting up of arm to manage InvIT
Photo Credit: Reuters

The board of IL&FS Transportation Networks Ltd has approved the setting up of a new arm to manage a proposed Infrastructure Investment Trust (InvIT), the firm in a filing with stock exchanges.

The company’s board also granted in-principle approval to transfer its shareholding in nine special purpose vehicles to the proposed Infra InvIT.

The company’s stock, which closed at Rs 2.19 per share on the BSE on Thursday, was trading 4.57% up at Rs 2.29 apiece at the time of writing this report.

IL&FS Transportation is a unit of the larger Infrastructure Leasing & Financial Services, which has been struggling since last year after it defaulted on its debt. The defaults prompted the government to replace its entire board. IL&FS is now selling its assets to pay off its debt. The firm and its units owed Rs 99,354 crore at the end of September 2018.

Investors in IL&FS Transportation include the IL&FS, the Standard Chartered IL&FS Asia Infrastructure Growth Fund, Bessemer Venture Partners and IndoStar Capital Finance Ltd, according to data with VCCEdge, the data research platform of Mosaic Digital.

In October last year, it was reported that IL&FS Transportation was in talks with the Singapore-based Cube Highways and Infrastructure Pte. Ltd to sell some of its road projects. People aware of the developments at the time said the toll-road assets were valued at $1.2 billion.

Cube Highways is a joint venture between global infrastructure investment firm I Squared Capital and International Finance Corporation (IFC), the private-sector investment arm of the World Bank.

Before that, in August, the company signed an agreement with Ramky Infrastructure Ltd to swap their stakes in two road joint ventures. As per the agreement, IL&FS Transportation would sell its entire 50% stake in NAM Expressway Ltd to Ramky and acquire the partner's 50% stake in Jorabat Shillong Expressway.

IL&FS Transportation’s other recent deals include selling a part of its stake in two road projects to Delhi-based Oriental Tollroads Pvt. Ltd in October 2017. In August 2016, the company agreed to sell an 86.74% stake in Andhra Pradesh Expressway Ltd to the Singapore-based Cube Highways for Rs 140.37 crore ($21 million).

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