KKR and Cube submit offers for Indian highways portfolio

Breaking News 29 May

KKR and Cube submit offers for Indian highways portfolio

Kohlberg Kravis Roberts (KKR), Cube Highways and Infrastructure, Edelweiss and Shrem Infrastructure Investment Trust (InvIT) have submitted non-binding offers for a portfolio of 12 highways belonging to PNC Infratech, according to two sources familiar.

The Uttar Pradesh-based infrastructure developer is aiming to complete the evaluation of the offers in the next 10 days, following which due diligence can begin, both sources said. It is aiming to sign definitive agreements by the end of December and complete the transaction by the end of the financial year in March 2024, they added.

All four bidders are interested in buying all the assets on sale, the sources said.

Mumbai-based financial group Edelweiss has submitted an offer through its highways investment platform, Sekura Roads, part of the group's Infrastructure Yield Plus fund. KKR is bidding through its Highways Infrastructure Trust, which it set up in 2021. Shrem is a Mumbai-based investment group.

KPMG is advising PNC Infratech. They were appointed in December last year.

On offer are 11 projects in the hybrid annuity model and one build, operate, transfer, toll project. The portfolio has total debt of INR 69bn (USD 834m) and the equity invested is INR 17bn, the sources said.

Some of the hybrid annuity projects are in advanced stages of construction and are scheduled for commissioning by April next year, the sources said, adding that all projects will be operational by then.

In the hybrid method, the National Highways Authority of India (NHAI) covers 40% of the cost and the developer arranges the rest in a combination of debt and equity. The company is repaid its investment with interest either in annual or half-yearly installments over a 15-year concession, during which the NHAI assumes the traffic risk.

Cube, Shrem, Edelweiss, KKR, Highways Infrastructure Trust and PNC Infratech did not respond to requests for comment.

Infralogic is the only infrastructure service to combine news, data, and predictive analytics to help you win new deals.

Request a demo