Infra.india Share News (IIP)

AIM-listed closed-ended investment company Infrastructure India's subsidiary, Vikram Logistic and Maritime Services (VLMS) has acquired the logistics division of ETA Engineering Pvt, which operates under the brand name of Freightstar. With the closing of the transaction, VLMS has acquired all of the assets and liabilities of Freightstar. This includes a licence from Indian Railways to operate container trains on a national basis, 11 operating container trains, land and a partially constructed terminal facility at Nagpur in the state of Maharashtra.Additionally, the transaction has resulted in VLMS acquiring 46 acres of land for its proposed terminal facility at Palwal in Haryana, along with agreements to acquire an additional 24 acres, various customer agreements, management and operating personnel as well as information technology systems. Infrastructure India has advanced a total of £10.8m to VLMS to support the execution of the combined business plan of VLMS and Freightstar since September 30th 2012. A preliminary valuation using the discounted cash flow methodology used by Infrastructure India to calculate the company's net asset value (NAV) indicated that the closing of the Freightstar acquisition would be materially accretive to the company's NAV. Infrastructure India said that the NAV would be expected to increase further following a refinancing of the merged VLMS and Freightstar businesses and said that discussions for this were underway with various lenders in India. Sonny Lulla, Chief Executive Officer of Infrastructure India, said: "We are delighted to have completed what is a transformational deal for VLMS. We believe that the combined business will be one of India's top three privately owned logistics companies, with the ability to offer state-of-the-art warehousing facilities and transportation across road and rail, whilst also benefiting from modest capital costs relative to its competitors. Lulla added: "Beyond that, the Indian logistics sector and supply chain management are both at an early stage of development and an expanded VLMS will be well placed to assume a leading role as these sectors grow to support on India's economic development in the years ahead."Infrastructure India was incorporated in the Isle of Man and provides investors with the opportunity to invest in Indian infrastructure assets.The company's investment objective is to provide capital growth and income by investing in infrastructure projects in India, with a particular focus on the energy and transport sectors.Infrastructure India's share price was unchanged at 28p at 08:12 on Monday.MF