India Grid Trust (“IndiGrid”), India’s leading infrastructure investment trust, has announced the acquisition of another transmission asset, East North Interconnection Company Ltd (ENICL), from Sterlite Power at a value of $134 million. With this acquisition, IndiGrid’s AUM will increase by 10 per cent to around $1.6 billion. IndiGrid’s asset portfolio will increase to nine power transmission projects, with a total network of 20 power transmission lines spanning across more than 5,800 ckm across 13 Indian states.
ENICL is a part of the Inter State Transmission System (ISTS) network developed by Sterlite Power. It consists of two 400kV transmission lines with a total of around 900 ckm across Assam, Bihar and West Bengal. It is a strategic asset, which is crucial for power exchange across north eastern and eastern region of India. IndiGrid had signed an extension of Right of First Offer agreement with Sterlite Power for ENICL in May 2019.
With this acquisition, IndiGrid’s asset portfolio will increase to nine power transmission projects, with a total network of 20 power transmission lines spanning across more than 5,800 ckm across 13 Indian states.
The acquisition has been funded by internal accruals, proceeds from the preference issue done in May 2019 and new debt. For the purpose of refinancing the existing debt in ENICL, IndiGrid has availed funding of Rs.900 crore from Axis Bank. With this acquisition, IndiGrid’s net debt/AUM will be at around 49 per cent.
Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said “This acquisition is in line with our strategy to acquire accretive assets with long term certainty of cash flows. Our focus is to not only ensure stable distribution to unit holders by owning assets with long term contracts but also grow it with accretive acquisitions.”
ENICL developed by Sterlite Power, consists of two 400kV transmission lines with a total of around 900 ckm across Assam, Bihar and West Bengal.
Pratik Agarwal, Managing Director of Sterlite Power, said, “Sterlite Power is proud to successfully close ENICL sale process in these turbulent times. This marks our eighth asset transfer to India Grid Trust and demonstrates our strong ability to commission and deconsolidate these system-critical assets from our balance-sheet. ENICL is one of the few critical transmission lines which connects the north east of India to eastern India. We look forward to commissioning more assets in the next financial year and transfer about another one billion dollar worth of assets to IndiGrid.”
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