KKR, GIC betting on India's power sector with $400 mln investment -sources

IndiGrid Infrastructure Trust

30/04/2019 11:43

By Kane Wu
    HONG KONG, April 30 (Reuters) - Global investment firm KKR &
Co Inc  KKR.N  is leading a deal to acquire a controlling stake
in India Grid Trust (IndiGrid)  IGTR.NS , in a bet on the
country's rapidly growing power sector, people familiar with the
transaction told Reuters.
    KKR, together with Singaporean sovereign wealth fund GIC
 GIC.UL , will acquire up to 57 percent of IndiGrid for about
$400 million, the people said. IndiGrid's current market value
is about $332 million.
    The deal would mark KKR's first infrastructure investment in
Asia since it set up a team late last year that focuses on the
sector in the region. 
    The pair will invest 20.64 billion rupees ($295 million) for
a 42 percent stake in the trust via a preference equity
issuance, the people said.
    KKR, having applied to become sponsor of IndiGrid, will then
acquire a 15 percent stake from its current sponsor, Sterlite
Power Grid Ventures Ltd, pending regulatory approval.
    The infrastructure investment trust, the first of its kind
in India, will separately raise around 4.5 billion rupees ($64.6
million) from other investors including Sterlite Power as part
of the equity issue, the people said, declining to be named as
the information is confidential.    
    GIC is contributing $140 million to the deal while KKR is
investing the rest from its own balance sheet, according to the
people. KKR declined to provide comment for the story. GIC did
not immediately respond to a request for comment.
    India's power demand grew at about 3.6 percent in 2018/19,
lagging overall economic growth.
    However the world's third-largest emitter of greenhouse
gases aims to double its clean energy capacity to 40 percent of
total power capacity by 2030, requiring new grid infrastructure,
most of which is expected to be funded by foreign money.
    The energy-hungry nation will launch $5 billion of
transmission line tenders, beginning in June, to deliver 175
gigawatts of power from renewable sources by 2022, government
officials told Reuters last month.  urn:newsml:reuters.com:*:nL3N21C3PM 
    Sterlite Power, a major private transmission developer,
created IndiGrid in 2016 to run its asset operations. The trust
raised $350 million in an initial public offering a year later.
    IndiGrid owns five assets developed by Sterlite and one from
a third party and 13 transmission lines.
    With the capital injection, it plans to acquire five more
electricity transmission assets worth 115 billion rupees from
Sterlite Power, which will more than triple its assets under
management to 170 billion rupees, according to the people.
    KKR will separately acquire a majority stake in Sterlite
Investment Managers Ltd, IndiGrid's investment manager, from 
Sterlite Power, they said.
    KKR hired David Luboff, former chief executive of Macquarie
Group's  MQG.AX  Asia Infrastructure Fund, as its head of Asia
Pacific Infrastructure from the beginning of this year. 
    It is considering launching an Asia-focused infrastructure
fund which could be as large as $1.5 billion, Reuters has
reported.  urn:newsml:reuters.com:*:nL3N1W44AB
($1 = 69.8600 Indian rupees)

 (Reporting by Kane Wu in Hong Kong, Additional reporting by
Sudarshan Varadhan in New Delhi;
Editing by Sonali Paul)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))