As ICICI Venture Backs Out, ICICI Bank Does The Deal With Jaypee Infratech
If ICICI Venture is not doing the deal, its parent ICICI Bank will do it. After the Mumbai-based private equity fund backed out of a $800 million deal with Delhi based Jaypee Group, the construction firm has struck a debt-cum-equity deal with Indian’s second largest bank. ICICI Bank has entered into an agreement to provide Rs 1,150-crore in debt and equity to the construction firm, which is building and operating the 165-km six lane Taj Expressway linking Noida with Agra.
According to The Economic Times, the deal involves ICICI Bank picking 1 per cent stake in Jaypee Infratech for Rs 250 crore, valuing it at Rs 25,000 crore or about $6.25 billion. The deal also includes a Rs 900 crore long-term loan to the company by the bank.
Last year, ICICI Venture had been in negotiations with Jaypee Infratech to pick up a stake in the company however this deal came unstuck. This deal also involved a similar structure where ICICI Venture was to buy a 1 per cent direct stake and an additional 9 per cent through convertible debentures.
Jaypee Infratech is currently a subsidiary of Jaiprakash Associates. While ICICI Bank holds 1 per cent in Jaypee Infratech, another 1 per cent is with Jaypee Employee Trust. The group is also in discussions to offload another 3 per cent to other external financial investors which would bring down the parent’s stake to 95 per cent. The firm is believed to be looking to go public in the near future.
Jaypee Infratech has the rights of development of 25 million sq meters of land at five or more locations along the proposed Taj Expressway. The land could be used for commercial, amusement, industrial, institutional and residential purposes.
