PNC Transfers Stake in SPVs

26 Nov 2024 CW Team

PNC Infratech Ltd. has received approval from the National Highways Authority of India (NHAI) to transfer its entire 100% stake in three subsidiary companies (Special Purpose Vehicles or SPVs) to Highways Infrastructure Trust (HIT), an Infrastructure Investment Trust (InvIT) managed by KKR & Co Inc. This transaction is part of a larger Rs 9,005 crore agreement signed in January 2024 between PNC Infratech, PNC Infra Holdings (its subsidiary), and HIT.

The three approved SPVs are PNC Bithur Kanpur Highways Pvt Ltd, PNC Gomti Highways Pvt Ltd, and PNC Aligarh Highways Pvt Ltd. These assets are among the twelve road projects included in the deal, encompassing approximately 3,800 lane kilometers across states like Uttar Pradesh, Karnataka, Madhya Pradesh, and Rajasthan. The portfolio consists of eleven National Highway projects under the Hybrid Annuity Mode (HAM) and one State Highway under the Build-Operate-Transfer (BOT) Toll model.

According to insiders, PNC Infratech is in the process of completing prerequisites such as change-in-control approvals from authorities and no-objection certificates (NOCs) from project lenders. NHAI has already approved the transfer for three assets, with approvals for seven more expected by mid-December 2024. PNC aims to close the transaction for ten assets, covering 85% of the total deal value, by the end of FY25.

The final two assets are anticipated to be transferred by the first half of FY26. The deal reflects PNC's strategic divestment approach to streamline operations and generate liquidity.

InvITs like HIT pool investments to own and operate income-generating infrastructure assets, offering investors stable long-term returns. This partnership underscores growing interest in India's infrastructure sector, especially among global investment firms like KKR.

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