The Board of London Stock Exchange-listed Infrastructure India plc has decided to go ahead with a proposed delisting from LSE and shifting trading to AIM. The delisting is subject to shareholders approval(at least 75% who vote) in the EGM scheduled in three weeks and trading on AIM is expected to begin by middle of November.
The shift from LSE is prompted by low asset size of the firm that makes AIM a more appropriate market as it would provide greater flexibility for future corporate activity (including portfolio moves other than reverse takeovers and transactions that fundamentally change the company’s business) besides compliance costs.
The firm is also looking to tweak the investment strategy post the shift from LSE to AIM. While maintaining the two existing investments and overall objective of targeting mid-sized infrastructure projects focused on energy and transport sectors, it will put greater focus on transport and, in particular, on investments in roads. Within the energy vertical it will put more focus on renewable energy.
As the firm raises more fund and spreads its portfolio, no single investment will comprise over 30% of its net asset value. Although there will be no minimum or maximum stakes that it will own in a project its target size of equity investment in any single entity project is likely to be £10-30 million ($15.8-47.5 million).
Infrastructure India plc had reported 44% jump in net profit for the year ended March’10 over the year ago period largely attributed to revaluation gains from its two investments in the country. It has 6.23% stake in Shree Maheshwar Hydel Power Corporation Limited (established to own and develop a 400MW run-of-the-river hydroelectric project situated on the Narmada River in Madhya Pradesh and the project expected to commence before December with first set of 40 MW turbine already installed).
The firm also has 26% stake in a toll road in Madhya Pradesh-Western MP Infrastructure & Toll Roads Private Limited comprising development of a 125 km stretch of four lane highway. The project is facing cost overrun and the LSE-listed firm had to put in additional £360,000 ($570k) to maintain its holding, financed out of fresh issue that raised £1.36 million ($2.15 million).