L &T Infra Debt Fund Ltd (L&T IDF), an infrastructure debt fund run by L&T Finance Holdings Ltd, said it has called off a $110 million equity investment by private equity firm Apis Partners.
L&T IDF had in April last year announced that it had entered into an agreement with Apis Partners for the PE investor to acquire a minority stake of 25.1% for $110 million. Of the total investment, 70% of the capital was to come into L&T IDF as growth capital and the remainder to purchase shares from existing shareholders of L&T IDF.
L&T Infra Finance holds 48.36% stake in L&T IDF, with the remaining stake being currently held by other L&T Group companies-L&T Finance Holdings Ltd (23.36%), L&T Finance Ltd (28.28%).
L&T IDF provides long-term refinancing to private sector and PPP (public-private partnership) infrastructure projects across multiple high-growth infrastructure sub-sectors including alternative energy projects such as solar and wind, and highways, that have each completed at least one year of satisfactory commercial operations.
On Saturday evening, L&T Finance informed stock exchanges that the transaction has been called off.
“This is with reference to our letter dated 25 April 2019 intimating about the proposed equity investment by an external party in L&T Infra Debt Fund Ltd, one of the subsidiaries of the company (Proposed Transaction). We wish to inform you that the Board at its meeting held on 20 March 2020 has noted that agreement executed in relation to the Proposed Transaction stands terminated due to expiry of the long stop date," the filing said, referring to expiry of a specified timeframe for closing the deal.
The Apis investment was planned to be utilized to grow L&T IDF’s loan book across a number of infrastructure subsectors such as renewable energy, roads, power transmission, airports and ports.
L&T Finance did not respond to emailed queries on the reasons for cancelling the deal. According to an 18 December rating report by Crisil, the current portfolio of L&T IDF comprises projects with an average of five years of satisfactory operations, as against the regulatory norm of one year of satisfactory operations. Crisil added that around 70% of the portfolio comprised of projects that are backed by the tripartite agreement or guaranteed/supported by a government/state authority.
“For fiscal 2019, L&T IDF’s profit after tax (PAT) as per Ind-AS, stood at ₹132 crore on total income of ₹755 crore as against a PAT of ₹139 crore and total income of ₹567 crore in fiscal 2018. For the half year ended September 30, 2019, the company reported a PAT of ₹119 crore on a total income of ₹450 crore as against a PAT of ₹72 crore on a total income of ₹381 crore in the corresponding period of the previous fiscal," the rating report said.
As on 30 September, L&T IDF’s outstanding loan book stood at ₹8,812 crore ( ₹8201 crore as on 31 March 2019; ₹6,989 crore as on 31 March, 2018), according to Crisil.