US-based private equity firm Lone Star is eyeing a portfolio of road projects from debt-laden infrastructure and financial services major IL&FS at an estimated cost of Rs 6,500 (about $1 billion).
The deal would be struck through debt assumption, according to a report by The Economic Times. Lone Star will finance the debt on IL&FS balance sheet as part of the deal. IL&FS is in the process of unwinding debt worth Rs 1.2 lakh crore.
IL&FS Transportation Networks has about 28 build-operate-transfer projects in its portfolio, several of which are operational. The estimated value of all projects is Rs 25,000 crore (about $4 billion).
The deal with Lone Star is in an advanced stage of discussion and awaiting formal approvals, the report said.
Sovereign wealth manager National Investment and Infrastructure Fund is said to be in talks with the beleaguered firm to acquire road and power assets of IL&FS. However, the talk with NIIF could be for a different set of properties.
Headquartered in Dallas, Texas, Lone Star is known for buying distressed assets globally. In the last two decades, the company has struck deals worth $180 billion.
IL&FS has been on a fund-raising spree. The board at its meeting on July 27 approved a proposal for issue of equity shares of face value of Rs 10 each to existing shareholders on a right basis up to Rs 3,000 crore.
In March, a committee of directors approved a plan to raise Rs 175 crore via issuance of non-convertible debentures (NCDs). The company also secured $55 million in masala loans (rupee loans) from the UAE-based Mashreq Bank.
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