Caisse de dépôt et placement du Québec (CDPQ) is planning to set up an infrastructure investment trust (InvIT) to house road assets acquired by the Canadian pension fund manager, Mint reported citing two people aware of the development. An InvIT is a pool of money collected from investors to manage operational infrastructure projects, in return for a regular yield to its unit holders. The Canadian fund manager is exploring setting up of an InvIT to hold the roads that it is buying from GIP, as well as other road assets that it might buy in the future. CDPQ has also started discussions with a few domestic institutional investors to invest in the proposed InvIT, as it has a mandate from their Canadian office to bring in co-investors. It plans to sell at least 10% of the InvIT to domestic investors.
Alibaba eyes November window for $10 billion IPO
Alibaba Group Holding Ltd is deciding between launching a sharply reduced $10 billion Hong Kong share sale in November or delaying the deal till next year as global uncertainty mounts, Bloomberg reported citing people familiar with the matter. China’s largest company is weighing its options for the city’s biggest first-time sale of stock since 2010, but the window for pulling off its mega deal in 2019 is closing fast. It can proceed with a required initial public offering (IPO) hearing—either after its 1 November earnings or 11 November Singles’ Day shopping gala—or risk postponing a deal altogether till 2020. Alibaba is reluctant to drag things out as uncertainty mounts around US-Chinese tensions and the global macroeconomic outlook, they added, asking not to be identified talking about a sensitive matter. The company is now considering the week after its quarterly earnings release or the country’s largest online retail bonanza as the most likely openings. Alibaba’s looking to raising closer to $10 billion, about half of an original target. The company can capitalize on the strong recent reception for Hong Kong IPOs, with several companies including Anheuser-Busch InBev NV’s Asian unit raising $1 billion or more.
Singapore’s Keppel Land invests in co-working firm Smartworks
Singapore’s Keppel Land Ltd has invested $25 million in Smartworks Coworking Space Pvt. Ltd, a flexible office space solutions provider, going against the grain of investors who are wary about committing capital to co-working operators after New York-based WeWork’s failure to pull off a share sale, Mint reported. Smartworks, which has sold a minority stake to Keppel Land, plans to use the capital to grow in the nine cities it operates in, and make inroads into smaller cities such as Coimbatore, Ahmedabad, Bhubaneshwar and Chandigarh. The firm has 23 operational centres with 43,000 workstations and plans to scale up to 90,000-100,000 over the next 15-18 months. So far, co-working firms have largely been self-funded, with some external investments, creating 350-400 operators of different sizes offering products at varying price points. The next phase of growth and survival will depend on the capital they raise, operational efficiency and investor confidence.
Adani, Fairfax, GMR among bidders for Jewar airport in Greater Noida
Adani Enterprises Ltd (AEL), Fairfax India Holdings Corp., and GMR Infrastructure Ltd were among the four bidders who qualified for the ₹30,000-crore Jewar airport at Greater Noida, Uttar Pradesh, Mint reported. The four companies met the technical and financial criteria set out by the state government to qualify for the bidding process for the Noida International Airport Ltd (NIAL) project. The airport, which is expected to be completed by 2040, will be the largest airfield in India with 4-6 runways. Mint could not confirm the identity of the fourth bidder. Around 20 companies, including government-run Airports Authority of India, Zurich airport operator Flughafen Zurich AG, and Anil Ambani-led ADAG group, had shown interest in the project. The bidding process for NIAL will be run by the Yamuna Expressway Industrial Development Authority, the state-run implementation agency for the greenfield project. The winning bid will be decided on the basis of the highest monthly per-passenger fee that the concessionaire will offer to the state government. Jewar is one of the 18 greenfield airports that have been given in-principle approval by the central government.
Yes Bank gets $1.2 billion lifeline, Rana Kapoor role to shrink further
A global entity has made a binding offer to invest $1.2 billion in the cash-starved lender, Yes Bank Ltd, through an issue of new shares, boosting its stock by as much as 35%, even as concerns remain about whether the proposal will pass muster with the banking regulator, Mint reported. The investment, if cleared by the Reserve Bank of India (RBI), will diminish the shareholding of Yes Bank’s original promoters Rana Kapoor and late Ashok Kapur’s wife Madhu Kapur. Such a large issuance, if made to a single investor, may result in a change of the bank’s promoters. Yes Bank may raise the $1.2 billion from multiple investors for the ease of getting approval from the Reserve Bank of India (RBI) and avoiding an open offer. Yes Bank officials have held discussions with four-five potential investors. Under this option, each investor may end up acquiring less than 10% in Yes Bank. Yes Bank may have approached US-based hedge fund Farallon Capital Management and private equity fund Carlyle Group. Significantly, if Yes Bank decides on multiple investors, then there will be a change in promoter holding but there won’t be any change in promoter entity unless one single entity buys more than 25%.
Fiat Chrysler-PSA merged entity likely to have Chinese major shareholder
The merged entity of Fiat Chrysler Automobiles NV and France’s PSA Group is likely to end up with a major Chinese shareholder, as carmaker Dongfeng Motor Corp. is seen hanging onto its stake in the French company, Bloomberg reported. China’s state-owned enterprises typically invest for the long term and for access to their partners’ capabilities and technologies, Bill Russo, founder of Automobility Ltd., a Shanghai-based advisory firm, told Bloomberg. It’s unlikely Dongfeng will use PSA and Fiat Chrysler’s merger to exit. Dongfeng got its 12% holding in PSA as part of a 2014 deal that gave struggling PSA better access to the Chinese market, a stake currently valued at about $3 billion. With PSA and Fiat Chrysler now carrying through on their plan to combine, Dongfeng could wind up owning about 6% of the new entity. Under the preliminary terms of the deal, the Peugeot family—another of PSA’s biggest shareholders—would be able to increase its stake in the new company by buying shares from France or from Dongfeng. Separately, Changan Automobile Co., which makes DS brand cars with PSA in China, plans to sell its share of their 50:50 joint venture, according to a Chinese media report citing a statement posted by a local asset exchange in Chongqing.
ShopClues to merge with Singapore-based Qoo10
Three years after achieving unicorn status, online marketplace ShopClues that has been struggling to survive in the competitive e-commerce space in India, has merged with Singapore-headquartered e-commerce platform Qoo10 Pte Ltd, in an all-stock deal, Mint reported citing an investor in ShopClues asking not to be named. ShopClues has received a very small cash infusion from (Singapore-based) Qoo10 Pte Ltd along with the full stock merger deal, to keep the company (ShopClues) afloat. Qoo10 has a strong presence in the Southeast Asia market, and their acquisition of ShopClues in India also in line with its proposed IPO plans, as it looks to grow its market base, as well as the seller base. A person aware of the deal, requesting anonymity, said that ShopClues was valued much lower than the $200-250 million which was pegged when ShopClues had explored a merger with rival online retailer Snapdeal early this year. However, a TechCrunch report pegs the valuation of ShopClues at $70-100 million in the current merger deal.
PE arm of IL&FS moves NCLT against DB Realty
IL&FS India Realty Fund (IIRF), a private equity arm of the debt-laden Infrastructure Leasing & Financial Services, has approached the dedicated bankruptcy court against Mumbai-based DB Realty over default of around ₹108 crore, The Economic Times reported. IIRF is one of the largest domestic realty-focused funds with investments in firms like Wadhwa Group, Noida Trade Towers and Aparna Infra Housing. IIRF is a part of IL&FS Investment Managers (IIML), which has raised and managed over $3.5 billion. The Mumbai bench of the National Company Law Tribunal (NCLT), presided over by justice VP Singh and a technical member Rajesh Sharma, has reserved the matter for order. This is the second time in two years that the realty firm faced an insolvency resolution plea from its lenders. In 2017, LIC Housing Finance had approached the tribunal after the firm failed to repay around ₹30 crore.
Lupin in talks to sell Japan unit Kyowa for $600 million
Lupin is in advanced talks to sell its Japanese generics subsidiary Kyowa Pharmaceuticals for an enterprise value of $600 million to a local player, The Economic Times reported. This, as it steps up efforts to significantly cut operations in the world’s third-largest pharma market. While the name of the buyer could not be independently verified, people close to the discussions said that an announcement is expected in November. In August, Lupin sold its injectables business to neo ALA Co, a whollyowned subsidiary of Abu Dhabi-based Neopharma group for an undisclosed sum to help streamline Japanese operations and increase focus on the branded generics business. Lupin acquired Kyowa in 2007 from the Sugiura family, two years after entering into a strategic alliance with them to market finished formulations in Japan. Kyowa, the sixth largest generics player in Japan, produces treatments in therapeutic areas including psychiatry and neurology. The specialisation helped them to successfully license and launch Bipresso, a specialty brand from Astellas for the treatment of bipolar depression.
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