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Brookfield, CIIF to acquire Indian assets

The transaction represents the largest asset sale at one go in the Indian infrastructure industry.

Canada’s Brookfield Asset Management (Brookfield) and Core Infrastructure India Fund (CIIF) have formed a consortium under the name BIF India Holdings to acquire nine infrastructure projects in India from Gammon Infrastructure Projects (Gammon), according to a statement.

The nine projects divested by Gammon include six road and three power projects. Six are operational, one is under expansion and two are under development.

The total project cost at completion of the asset sale is estimated to be roughly INR67.5 billion (€903 million; $1 billion), comprising INR29.35 billion for the six operational projects and INR38.15 billion for the remaining three projects.

The deal includes an immediate cash payment of INR5.63 billion. It will allow Gammon’s consolidated debt to be reduced from INR39.47 billion to INR22.29 billion.

This transaction represents the largest asset sale at one go in the Indian infrastructure industry. Abhijit Rajan, chairman and managing director of the Gammon Group, highlighted that it reflects the improved sentiment being demonstrated by foreign investors due to the positive approach of the government in the infrastructure space.

Gammon was among the first to invite foreign equity funds in the infrastructure space back in 2004. Now with an improved financial position, Gammon plans to focus on its other project companies with interests across various sectors, such as road, expressways, ports and power.

Anuj Ranjan, Brookfield’s managing partner, commented: “This transaction represents Brookfield’s first major investment in Indian infrastructure, and provides us a great platform to participate in the Indian growth story over the long term.”

Brookfield now manages over $200 billion in assets, focusing on infrastructure, renewable energy, private equity and property, while CIIF is an India-focused infrastructure fund managed by the Singapore branch of Kotak Mahindra.

Ambit Corporate Finance is the exclusive financial adviser to Gammon on this deal.