Cintra buys out a 24% stake of GIC in IRB Infrastructure Trust for EUR 740 Million

Cintra is a worldwide leader in developing and managing highways and transportation infrastructure. It ensures the highest efficiency in the construction, improvement, maintenance, and management of road infrastructure to ensure the highest safety levels and customer satisfaction. Its parent organization, Ferrovial Group, is a global developer of transport infrastructure, mobility solutions, and engineering and is engaged in the construction of civil works and buildings.

IRB Developers Limited

IBR Developers Limited is India’s leading roads and highways infrastructure developer with a major presence in the Build-Operate-Transfer Space. The company launched and listed India’s first Infrastructure Investment Trust(InvIT) in 2017. The company had issued its IPO of Rs. 185/share in 2008 and had raised Rs. 9,440 Million. The company’s business model integrates concessions and constructions and has paved the way of an excellent track record of project acquisitions in the region.

IRB Infrastructure Trust

It is a private trust(private InvIT) registered under the Indian Trusts Act, 1882, and is held by the IRB Infrastructure Developers Ltd. as Sponsors with a stake of 51% and 49% by GIC. It supports the development of toll roads and highways in India. On 3 April 2023, the Trust became the first private InvIT to be listed on NSE after SEBI issued guidelines on the listing framework for the non-listed InvITs. This listing was also approved by MMK Toll Road Pvt. Ltd., and Investment Manager(IM) to the trust.

The Transaction

Cintra, a toll road subsidiary of Ferrovial, agreed to acquire a 24% stake in the IRB Infrastructure Trust for a total investment of 6,711 crores. These stakes are acquired from affiliates of GIC. Post-transaction, GIC will retain a 25% stake in the trust and IRB Infrastructure Developers will maintain the current 51% stake. Ferrovial marks this transaction as the completion of its investments in the Indian market.

Conclusion: The acquisition involves a combination of a 24% stake in the Private InvIT by Cintra SPV 1 and a 24% equity shareholding and the right to nominate a director on the BOD of MMK Toll Road Pvt. Ltd., the IM of the Private InvIT by Cintra SPV 2.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.