Infrastructure investment trust India Grid Trust (IndiGrid) has agreed to buy five electricity transmission assets worth nearly $1.7bn (Rs115bn) from Sterlite Power.
Sterlite Power established IndiGrid in 2016 and will continue to remain IndiGrid’s sponsor and project manager.
IndiGrid has signed a share purchase agreement for the two transmission assets NRSS XXIX and OGPTL, which are already operational. The remaining three assets will be acquired after they become operational.
The development follows the injection of funds provided by a new preference unit issuance worth Rs25.1bn.
As part of the deal, KKR and GIC have agreed to make an investment of Rs10.8bn ($157m) and Rs9.8bn ($142m) to collectively own 42% of IndiGrid’s outstanding units.
KKR also intend to become a sponsor of IndiGrid and acquire an additional 15% of IndiGrid’s total units from Sterlite Power. KKR and GIC will jointly own nearly 57% of IndiGrid’s outstanding units.
Under a separate transaction, KKR has agreed to purchase a majority stake in Sterlite Investment Managers.
IndiGrid CEO Harsh Shah said: “We welcome KKR, GIC and our other investors and who have showcased their confidence in IndiGrid, and we look forward to benefiting from KKR and Sterlite Power’s expertise and experience in investment and asset management.”
“With this new capital investment, we will reach our goal of Rs17,000 crores of assets under management and are well on our way to achieving Rs30,000 crores of assets under management by 2022 while also providing stable and predictable returns to our investors.”
Completion of each transaction is subject to customary closing conditions, including regulatory and unitholder approvals.
With the completion of the proposed acquisitions, IndiGrid’s asset under management is expected to rise to Rs170bn ($2.5bn).