Infrastructure India extends existing loans amid delays to refinancing

Infrastructure India has agreed the extensions to the maturity of an existing $48.4m unsecured bridging loan facility originally provided in June 2017 by Cedar Valley Financial, and an existing $21.5m working capital loan originally provided in April 2013 by GGIC, it announced on Tuesday.

The AIM-traded firm had announced on 31 July that it had entered into conditional proposed financing agreements for up to $125m with PSA International - a global port group - and Gateway Partners.

It said that transaction included the issue of convertible preference shares in Distribution Logistics Infrastructure India, the parent company of Distribution Logistics Infrastructure (DLI), for a consideration of $75m, and the sale of 24% of DLI by the group for a consideration of $50m.

Following Infrastructure India (IIP) shareholder approval of the proposed financing at an extraordinary general meeting on 24 August, the parties were reportedly continuing to progress towards completion of that transaction, with several conditions precedent to the closing having been met and the remainder - including key governmental approvals - expected to be met in the coming weeks.

“Ahead of completion of the proposed financing, IIP has agreed an extension to the maturity date of the bridging loan and an extension to the maturity date of the working capital loan to 21 January,” IIP’s board said in its statement.

“The company remains in discussions with Cedar Valley and GGIC in relation to the possible partial repayment of the bridging loan and the working capital loan following the completion of the proposed financing, and with a view to further extending the maturity of both the bridging loan and the working capital loan.”

As a result of the continued delays in completion of the proposed financing, and IIP's current inability to commit additional funding to DLI - its unaudited cash balances as at 31 December were about £0.25m - DLI had recently entered into short term borrowing facilities in India and, in part, had begun to divert cash from operations in order to service DLI debt facilities.

That action could affect DLI's operational performance in the short term, IIP cautioned.