IIP.L Regulatory News (IIP)

Infrastructure India plc

Secured Loan Facility

Infrastructure India plc, the infrastructure fund investing directly into assets in India, announces that the Company has entered into an agreement, dated 27 February 2012, with IIP Bridge Funding, LLC (the "Lender"), an affiliate of Guggenheim Global Infrastructure Company Limited ("GGIC"), for the provision of a US$25 million (approximately £15.9 million) secured loan facility (the "Loan").

The Loan will be used to provide working capital to fund the Group's continued expansion including the provision to Vikram Logistic & Maritime Services Private Limited ("VLMS") of £7.5 million.

The financing to VLMS will be used to repay an existing maturing unsecured debt facility of Rs. 50 Crore (approximately £6.5 million). VLMS is expected to commence construction of two large container processing and warehousing facilities in the cities of Chennai and Bangalore during the first quarter of 2012, and these facilities are expected to commence operation towards the end of 2012. The Group's interest in VLMS is currently 99.99 per cent.

The Loan is for a period of 12 months at an interest rate of 12 per cent. per annum for the first six months and 15 per cent. per annum for the second six months, payable quarterly in arrears. The Loan is repayable after 12 months. An arrangement fee of US$625,000 is payable, equivalent to 2.5 per cent. of the Loan.

The Company has granted security for the Loan to the Lender in the form of charges over shares in its wholly owned subsidiaries, Infrastructure India Holdco and Indian Energy Limited.

The Company has agreed to seek relevant authorities and consents to issue to the Lender, share options ("Options") over up to 2,970,000 ordinary shares in the Company ("Ordinary Shares") upon disbursement of the Loan. Options over a further 2,970,000 shares will be issued to the Lender if the Loan remains outstanding past 1 September 2012. The Options have a strike price of 64.3 p, will be settled in Ordinary Shares, and may be exercised at anytime up to the fifth anniversary of the Loan. If the Options are not issued the Lender will be entitled to agreed redemption premiums of up to US$2.7 million. Should the Options be issued, then the redemption premiums in respect of the Loan will fall away.

The Company also intends to seek shareholder approval in a general meeting, to the removal of certain provisions in the Company's Articles of Association ("Articles") restricting the transfer to, or holding of Ordinary Shares by, US persons (as defined in the Articles).

Related Party Transaction

A wholly owned subsidiary of GGIC is IIP's asset manager and GGIC, directly and indirectly, is interested in 31.39 per cent. of the Company's issued share capital. Under the AIM Rules for Companies ("AIM Rules"), GGIC and IIP Bridge Funding, LLC are, therefore, deemed to be related parties of the Company and the Loan is a related party transaction pursuant to Rule 13 of the AIM Rules. The independent directors of IIP (namely Tim Walker and M.S. Ramachandran) consider, having consulted with Smith & Williamson Corporate Finance Limited in its capacity as the Company's nominated adviser, that the terms of the Loan are fair and reasonable insofar as the shareholders of IIP are concerned.

Commenting on the Loan, Sonny Lulla, IIP's Chief Executive, said:

"We are pleased to have secured this loan facility in what remains a difficult financial environment. As referred to in our half yearly report in December 2011, it is our intention to raise further capital for the Company over the course of the next six to twelve months which will enable us to repay the Loan, fund the development of our existing asset base, where appropriate, and pursue additional investment opportunities. We continue to see progress with all our investments and look forward to reporting on these developments in due course."

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