Canada Pension Plan Investment Board (CPPIB) is in advanced discussions with Sadbhav Infrastructure Project (SIPL) to buy 12 operating road assets for around $400m-$500m (Rs30bn).

Sources familiar with the development were quoted by The Economic Times as saying that CPPIB will acquire Sadbhav’s road assets through the infrastructure investment trust (InvIT), which was established by L&T Infrastructure Development Projects.

CPPIB and Allianz Capital Partners hold approximately 55% of the InvIT units.

As of December 2018, Sadbhav Engineering owns almost a 69% stake in SIPL that develops, operates and maintains highways and roads in Maharashtra, Gujarat, Rajasthan, Karnataka, Haryana, as well as Telangana.

“The semi-finished assets are part of the bilateral discussions, which are expected to be finalised by the end of March.”

Sources directly involved in proceedings told the publication that talks are focussed on the amount of units Sadbhav will also own in the InvIT.

The semi-finished assets are part of the bilateral discussions, which are expected to be finalised by the end of March.

SIPL manages a portfolio of 23 roads and highways build-operate-transfer (BOT) and hybrid annuity mode (HAM) projects. From these, 12 roads with a total of 3,338km of lanes are due to be fully operational from 31 March. Sorry, there are no polls available at the moment.

Other investors to have expressed an interest in acquiring a stake in Sadbhav Infra include Italy-based Autostrade, Cube Highways, and Canadian pension funds such as CDPQ.

In May 2018, CPPIB bought a 30% stake in InvIT for $156m, while Allianz Group gained a 25% stake in the company. The trust sponsor L&T Infrastructure Development Projects (L&T IDPL) owns a 15% stake.