Reliance Infrastructure has received in-principle approval from the National Highways Authority of India (NHAI) for Harmonious Substitution of the Delhi-Agra (DA) Toll Road project to Cube Highways.

In view of the difficulties being faced by Concessionaires in Public-Private-Partnership (PPP) projects, the Government has decided to permit the substitution of existing Concessionaires in a harmonious manner, in accordance with the agreed provisions.

This approval came through on January 7 and paves the way for RInfra to reduce its debt significantly, RInfra officials told BusinessLine.

Punit Garg, CEO Reliance Infrastructure, told BusinessLine that this is in line with its commitment to its 16 lenders. The sale of the DA toll road is the first of many liquidity events that will move the company towards becoming debt-free in 2020, Garg added.

On July 6, 2019, RInfra’s lenders signed an inter-creditor agreement (ICA) in an effort to resolve its debt. An ICA provides the ground rules for the finalisation and implementation of a resolution plan (RP) for borrowers, with credit facilities from more than one lender.

RInfra’s lenders have all signed up to resolve its debt, on the back of a June 7 RBI circular on ‘Prudential Framework for Resolution of Stressed Assets’.

With this transaction, RInfra will receive an Enterprise Value of Rs 3,600 crore, including equity of up to Rs 1,700 crore, which it has said will be used to repay its debt. The remaining Rs 1,900 crore will be transferred to the books of Singapore-based Cube Highways, who have bought the Delhi-Agra toll road. This approval paves the way to close the sale of the 180-km 6-lane DA Toll Road to Cube Highways and Infrastructure III Pte Ltd. (CUBE III), which is owned by a Singapore-based Global Infrastructure Fund, I Squared Capital, and a wholly-owned subsidiary of the Abu Dhabi Investment Authority.

The transaction would see RInfra reduce its total debt of Rs 6,000 crore to Rs 4,300 crore and goes along with its stated objective of exiting the roads-related business.

Cube will operate the DA toll road till 2038.

Total amount outstanding (on Dec 31, 2019) Rs 4,597.06 crore Amount on default date (on Dec 31, 2019) Rs 1,048.70 crore Total short term and long-term debt Rs 6,073.66 crore

Source: Stock exchange disclosure.