Majority of the shareholders of LSE-listed Infrastructure India Plc (IIP) voted down a proposed change in board of the company by one of its key shareholders, Advisor UK in an extraordinary general meeting (EGM).
Shareholders representing 85.7% of the total votes cast and 69.4% of the issued share capital of IIP supported the board and voted against the resolutions, said a company statement. IIP had joined a growing list of companies that were facing shareholder ire.
After the EGM, IIP in a statement said, "in particular, the Board will focus on its two existing investments, both of which are continuing to progress well, and it looks forward to providing further updates in due course."
Advance UK, that owns 10.1% stake in IIP, had last December requisitioned a meeting to remove three out of existing four board of directors(namely Rupert Cottrell, Prodaman Sarwal and Timothy Walker) and replace them with two of its own nominees(John Bourbon and Geoffrey Miller). It had alleged high overheads with IIP and said the firm should be merged with a large infrastructure company.
In addition, it has alleged that IIP board did not adequately consult the investment advisor nor the shareholders before committing investment in the transportation and logistics sector in India by picking 26% stake in toll road project in central India - Western Madhya Pradesh Infrastructure & Toll Roads Ltd(WMPITRL).
IIP has made two investments till date: Rs 110 crore for 6.23% in Shree Maheshwar Hydel Power Corporation Limited (SMHPCL), besides Rs 96 crore for 26% stake in WMPITRL. The two deals worth over £24 million accounts for over two thirds of total funds raised through the IPO in June 2008.
SMHPCL was specifically established to own and develop a 400MW hydroelectric power project situated on the Narmada River in Maheshwar(Madhya Pradesh) and first of the ten turbines of 40MW each to be installed and commissioned at the project due to be operational in the first half of 2010.
WMPITRL has a toll road project comprising a single 125 km stretch of road and is part of the local state government sponsored road upgrade programme. While tolling operations were originally anticipated to commence around April 2010, partial tolling commenced on approximately 67 km of the road. The project however has a cost overrun and IIP had to put in more money.
Over the recent past, IIP has replaced its investment advisor Bloomsbury Asset Management Advisors (BAMA) after the latter, apparently, faced staff exits with Akur Partners LLP who has been brought in as ‘retained asset advisor’. Advance UK has apparently also pitched for bringing back BAMA as an investment advisor. Incidentally, Advance UK is itself looking to fold up.
IIP management had earlier said it has received responses from shareholders representing 25% of the equity capital who are going to reject the proposal of Advance UK and had asked other shareholders to reject the proposal as it would derail the accrual of revenues that are going to begin from the portfolio companies in India.