India’s Reliance Infra to sell $1.5bn toll road portfolio

The developer is looking to divest all of its operating assets in a bid to pare debt and fund its recent entry into the defence sector.

Reliance Infrastructure has shortlisted two consortia for the sale of its toll road portfolio as it strives to reach a deal valued at more than $1.5 billion by September. 

The selected groups comprise “long-term international funds” interested to buy the company's entire road portfolio, Reliance Infrastructure chief executive Lalit Jalan told the local press.

It is understood that the shortlisted parties include Canada-based Brookfield Asset Management and Canada Pension Plan Investment Board

Reliance and CPPIB declined to comment on the bidding progress while Brookfield hasn’t responded to an email query by press time.

Reliance has a total of INR90 billion ($1.33 billion; €1.2 billion) currently invested in its 11 BOT road projects, INR50 billion of which is debt. Jalan said the company would look at a premium valuation to the investments it has made. 

The CEO aims to make the company debt-free on a standalone basis by March 2017 through the sale of some of its assets. 

In recent months, the company also agreed to sell a 49 percent stake in its Mumbai power unit to Canada’s Public Sector Pension Investment Board for INR35 billion, as well as its cement assets to India’s Birla Corporation for INR48 billion. 

Reliance Infrastructure’s standalone debt totalled about INR155 billion as at 31 March. Consolidated debt stood at INR250 billion. 

The company now focuses on developing its defence business after acquiring defence ship maker Pipavav Defence and Offshore Engineering in December. 

Other Indian infrastructure companies, such as GMR Infrastructure and IL&FS, have been offloading toll road assets in the recent months to the likes of US-based I Squared Capital and Australia’s Macquarie in a bid to shore up their balance sheets.