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Brookfield in talks to buy Madhucon’s road projects

LiveMint logoLiveMint 25-09-2017 Swaraj Singh Dhanjal

Mumbai: Canadian asset manager Brookfield Asset Management Inc. is in talks with infrastructure company Madhucon Projects Ltd to acquire toll roads worth up to Rs2,000 crore (approximately $300 million), said two people aware of the development.

Brookfield, which entered India in 2015 through the purchase of road assets of Gammon India Ltd, has been an active infrastructure investor in India with focus on roads, renewable power, telecom towers and real estate assets. Brookfield manages assets worth over $200 billion globally.

“Brookfield is evaluating buying around four-five toll road assets of Madhucon Projects and is currently conducting diligence on these assets. Most of these assets are located in Tamil Nadu,” said one of the two people cited above, requesting anonymity as the talks are private.

The transaction, if concluded, could see Brookfield buy these assets for a consideration of up to Rs2,000 crore, he added.

“As a matter of policy, Brookfield doesn’t comment on speculation or market rumour; therefore, we will decline to comment,” a spokesperson for Brookfield said in an emailed response to a query. Emails sent to N. Seethaiah, managing director at Madhucon Projects, did not elicit any response.

Brookfield has been actively scouting the Indian market for road assets. In August, news channel ET Now reported that the Canadian asset manager was in talks to acquire a few road assets from KMC Constructions.

In August 2015, Brookfield announced its first road asset purchase in India when Gammon Infrastructure Projects Ltd agreed to sell six road projects and three power projects to BIF India Holdings Pte. Ltd, controlled by Brookfield Asset Management and Core Infrastructure India Fund Pte Ltd (CIIF), an India-focused infrastructure fund managed by the Singapore branch of Kotak Mahindra (UK) Ltd.

In December, Reliance Communications Ltd said it had signed a binding agreement with Brookfield to sell its tower business for an upfront payment of Rs11,000 crore in cash.

On the real estate side, the asset manager in October 2016 acquired the office and retail assets of Hiranandani Developers Pvt. Ltd in the Mumbai suburb of Powai at a valuation of close to $1 billion, Mint reported. Hiranandani Developers owns around 5 million sq. ft of rent-generating office and retail assets at Hiranandani Business Park and Hiranandani Gardens in Mumbai. Hiranandani Gardens, a 250-acre development, is the firm’s signature project.

The road sector has seen a fair amount of M&A activity in the past couple of years, with investors such as I Squared Capital’s road platform Cube Highways, IDFC Alternatives India Infrastructure Fund II and Tata Realty and Infrastructure Ltd, apart from Brookfield, being active buyers in the market.

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