India fund targets $102m from placing

AIM-listed Infrastructure India is seeking additional capital to help support VLMS, the largest holding in its portfolio.

Infrastructure India, which invests in Indian assets and is listed on London’s Alternative Investment Market (AIM), is seeking to raise up to $102 million (approximately £59.5 million) by way of a placing at 18 pence per share.

A statement containing details of the placing said that Guggenheim Global Infrastructure Company (GGIC), which is Infrastructure India’s majority shareholder, may be interested in subscribing for 51.17 percent of the placing shares – and may also subscribe for the remainder of the placing shares in the event that existing or new shareholders do not wish to subscribe.

GGIC is an affiliate of Guggenheim Partners, the US financial services firm.

Infrastructure India is a closed-end investment company which was admitted to trading on AIM in March 2011. It currently has interests in five Indian infrastructure assets in its portfolio in the transport and energy sectors, two of which are wholly owned.

The statement says that the past fiscal year has seen “an unprecedented combination of slowing growth, difficult credit markets, record lows for the rupee, policy uncertainty and a national election [which] has impeded Indian governmental institutions, including public sector banks, on which the company’s asset class relies to function properly”.

It added that Vikram Logistic and Maritime Services (VLMS), the firm’s largest holding, has faced continued delays in the disbursement of approved debt from a banking consortium and now faces a “significantly strained liquidity position”. The placing proceeds will be used to help ease VLMS’ financial difficulties and provide the group with sufficient cash resources until at least the end of next year.

The placing is conditional upon shareholder agreement at the firm’s extraordinary general meeting (EGM) on 11 August 2014.