Proposed US$125 million financing
Posting of Circular and Notice of Extraordinary General Meeting
Infrastructure India plc, an AIM quoted infrastructure fund investing directly into assets in India, is pleased to announce that it has agreed a conditional proposed financing with PSA International and Gateway Partners pursuant to which up to US$125 million (approximately £95.5 million), before expenses, will be made available to the Group (the “Proposed Financing”).
The Proposed Financing will provide sufficient capital to enable Distribution Logistics Infrastructure Private Limited (“DLI”) to complete, commission and ramp up all of its terminal facilities, provide additional working capital for both DLI and the Group and would also enable the Company to repay or partially repay existing debt facilities in due course.
DLI is a supply chain transportation and container infrastructure company headquartered in Bangalore and Gurgaon with a material presence in central, northern and southern India. DLI provides a broad range of logistics services including rail freight, trucking, handling, customs clearing and bonded warehousing with terminals located in the strategic locations of Nagpur, Bangalore, Palwal (in the National Capital Region) and Chennai. DLI is the largest asset in the Company’s portfolio and one of the top privately owned Indian logistics businesses.
Significantly, the partnership with PSA, which is one of the leading global port groups with significant port operations across Asia, Europe and the Americas, which would result from the Proposed Financing will provide DLI with the additional expertise and know-how of an established global platform and enhanced marketing opportunities.
The Proposed Financing will see:
· the issue by Distribution and Logistics Infrastructure India (“DLII”), DLI’s parent company, of up to 7,500 convertible preference shares in DLII’s capital (the “DLII CPS”) for an aggregate consideration of up to US$75 million; and
· the sale by the Group of existing ordinary shares in DLII representing 24% of DLII’s issued ordinary share capital (“Sale Shares”) currently held by the Group for a consideration of US$50 million.
IIP is currently interested in 100% of the share capital of DLI. Following the disposal of the Sale Shares, IIP’s interest in DLI will be reduced to 76%. On conversion of the DLII CPS, which will take place based upon an enterprise valuation of DLI at 7.5x EBITDA for the 12 months ending 30 June 2021, IIP’s interest in DLI will be reduced to a minimum of 20% and a maximum of 49%.
However, shareholders should note that on conversion of the DLII CPS following of the occurrence of a default under any of the Transaction Documents, IIP’s interest in DLI could be reduced to zero.
The net proceeds of issue of the DLII CPS will be used to provide construction and working capital to DLI and the proceeds from the sale of the Sale Shares are intended by the Board to be applied by the Group towards the repayment or partial repayment of existing IIP loan facilities in due course and to provide additional working capital to the Group.
The material agreements entered into in connection with the Proposed Financing (the “Transaction Documents”) are described below.
The proposed disposal of the Sale Shares, being existing assets of the Group, is of a sufficient size relative to that of the Group to constitute a disposal resulting in a fundamental change of business pursuant to Rule 15 of the AIM Rules for Companies and, as a result, completion of the Proposed Financing is conditional upon the approval of Shareholders.
The Company will, therefore, today post a circular (the “Circular”) to IIP shareholders providing information regarding the Proposed Financing and convening an extraordinary general meeting of the Company at which Shareholder approval of the Proposed Financing will be sought (the “EGM”). If the resolution put to Shareholders at the EGM is not passed, the Company will be unable to proceed with the Proposed Financing.
The Board believes that the Proposed Financing is in the best interests of the Company and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the resolution to be proposed at the EGM as the Directors intend to do in respect of their own beneficial shareholdings.
In addition, the Directors of IIP confirm that they have received an irrevocable undertaking to vote in favour of the Resolution from GGIC IIP Holdings, Ltd. in respect of 175,324,980 Ordinary Shares, representing 25.77 per cent. of the Company’s issued ordinary share capital.
The EGM is being convened for 11.00 a.m. on 24 August 2018 at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP.
The Circular and Notice of EGM will shortly be available on the Company’s website at www.iiplc.com.
IIP has entered into conditional proposed financing agreements pursuant to which a total of up to US$125 million (approximately £95.5 million) before expenses will be made available to the Group (the “Proposed Financing“) by way of the issue of up to 7,500 DLII Convertible Preference Shares (“DLII CPS”) in the capital of Distribution and Logistics Infrastructure India (“DLII“) for an aggregate consideration of up to US$75 million and the sale by the Group of ordinary shares in DLII, representing 24 per cent. of DLII’s issued share capital, currently held by Infrastructure India Holdco (“IIH“) (“Sale Shares“) for a consideration of US$50 million.
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