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Infrastructure India sells prime asset but not for cash

a shipping container branded dli being held aloft in a logistics facility 230907 iip dli

Infrastructure India is selling its interest in 99.99% of Distribution Logistics Infrastructure Private Limited to Pristine Malwa Logistics Park Private Limited. Pristine Malwa is a wholly owned subsidiary of Pristine Logistics and Infraprojects Limited.

The Pristine Group provides end-to-end multi cargo logistics solutions, and services including port handling, road and rail transport, warehousing, shipping, stevedoring, customs handling, and integrated logistics in India and Nepal.

DLI Mauritius will receive a cash payment of approximately US$10m on closing, and up to 33% of Pristine Malwa’s issued share capital. Pristine Group requires the consent from the investment committee of their majority shareholder, Global Infrastructure Partners, in order to proceed with closing of the transaction. The transaction is also subject to consent from the group’s lenders including GGIC, Ltd., Cedar Valley Financial and IIP Bridge Facility LLC.

DLI is a supply chain transportation and container infrastructure company headquartered in Bangalore and Gurgaon with a material presence in central, northern and southern India. DLI provides a broad range of logistics services including rail freight, trucking, handling, customs clearing and bonded warehousing with terminals located in the strategic locations of Nagpur, Bangalore, Palwal in the National Capital Region and Chennai. DLI is Infrastructure India’s largest asset and was valued at £176.2m in its unaudited interim results for the period ended 30 September 2022, representing 88% of the portfolio at that date.

Pristine Malwa is the parent company and c. 95% shareholder of Sical Logistics Limited, a company listed on the India’s National Stock Exchange and the BSE (formerly named the Bombay Stock Exchange). Pristine Malwa is also engaged in developing and managing private freight terminals in India. Sical provides port handling, road and rail transport, warehousing, shipping, stevedoring, customs handling, trucking, retail logistics, mining, and integrated logistics, with expertise in end-to-end bulk commodity logistics including coal, iron and cement.

The statement says “The transaction allows the company to remain invested in the Indian logistics sector through its substantial interest in the merged group and realise better value for the company’s shareholders at the time of exit, which is contemplated to be within 24 to 36 months from the date of closing of the transaction.”

[QD comment: Periodically, we report the latest ‘can-kicking exercise’ as Infrastructure India’s lenders extend the maturity of its debts. This has been going on for years now and the outstanding interest keeps piling up. There is a $119m term loan with $82m of unpaid but accrued interest, a $21.5m working capital loan with accrued interest of $27m, and a $64.1m bridging loan with accrued interest of $55m. That’s $368.6m of debt and interest – the $10m up front payment for DLI won’t scratch the surface of that, and it looks very much as though the company’s NAV is negative.]

IIP : Infrastructure India sells prime asset but not for cash

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