Infra.india Regulatory News (IIP)

20 August 2014

Infrastructure India plc

("Infrastructure India", "IIP" or the "Company")

Subscription Agreement

Infrastructure India plc, the infrastructure fund investing directly into assets in India, announces that it has today entered into a subscription agreement (the "Subscription Agreement") with Barnet Holdings, Ltd. ("Barnet"), an affiliate of the Company's majority indirect shareholder, GGIC, Ltd. ("GGIC").

The Subscription Agreement underpins the proposed placing to raise US$102 million before expenses (the "Placing") through the issue of 337,607,041 new ordinary shares in the Company (the "Placing Shares") at a price of 18 pence per share (the "Placing Price") first announced by Infrastructure India on 15 July 2014.

Subscription Agreement

Under the Subscription Agreement, Barnet has agreed, subject to certain terms and conditions, to subscribe for 172,739,590 Placing Shares, being the number of Placing Shares pro rata to GGIC's indirect shareholding in the Company (the "Subscribed Shares"), at the Placing Price and has committed to subscribe, subject to certain terms and conditions and at the Company's request, for the balance of the Placing Shares also at the Placing Price in the event that certain other existing shareholders, or new investors, do not wish to subscribe in the Placing (the "Unsubscribed Shares").

Barnet will receive a 1 per cent. commitment fee on the aggregate value at the Placing Price of all of the Unsubscribed Shares it has committed to subscribe for and an additional fee of 2 per cent. on the aggregate value at the Placing Price of those Unsubscribed Shares for which it does actually subscribe. Barnet will receive no fee for its subscription for the Subscribed Shares. 

The Placing

The Placing Price represents a premium of approximately 24 per cent. to the mid-market closing price of an ordinary share of 14.50 pence on 14 July 2014 (being the latest practicable date prior to the announcement of the Placing).

The Placing is expected to close at 3:00 p.m. (UK time) on 21 August 2014 but may close earlier or later at the absolute discretion of the Company.

In the event that Barnet subscribes for all of the Placing Shares, the combined direct and indirect interests of GGIC and Barnet in the Company would rise from GGIC's current indirect interest of 51.17 per cent. to a combined 75.40 per cent. of the enlarged issued share capital. GGIC and Barnet are deemed to be acting in concert within the meaning of the City Code on Takeovers and Mergers (the "City Code"). As a result, and in accordance with note 11 to Rule 9.1 of the City Code, Barnet's subscription for the Subscribed Shares and Unsubscribed Shares does not give rise to an obligation to make a general offer for the Company under the City Code.

The Company has engaged Nplus1 Singer Capital Markets Limited ("N+1 Singer"), pursuant to which N+1 Singer has agreed to use its reasonable endeavours to procure subscribers for the Unsubscribed Shares.

Application will be made to the London Stock Exchange for the Placing Shares, which rank pari passu with the Company's existing issued ordinary shares, to be admitted to trading on AIM. Dealings are expected to commence at 8.00 a.m. on or around 28 August 2014. Following the issue of the 337,607,041 Placing Shares, the issued ordinary share capital of the Company will consist of a total of 680,267,041 ordinary shares. No ordinary shares are held in treasury.

Agreement between Barnet and Franklin Park

The Company has been notified that, alongside the Subscription Agreement, IIP's asset manager, Franklin Park Management LLC ("FPM"), and Franklin Park Holdings, LLC ("FPH"), the sole member and shareholder of FPM, have today entered into a letter of agreement with Barnet. Under this letter of agreement Barnet has been granted an option, conditional upon Barnet's subscription for the Subscribed Shares and Unsubscribed Shares as described above, to purchase from FPH (a) 100 per cent. of FPM's membership interests and (b) FPH's existing 15.7 per cent. direct and indirect interest in GGIC. The option is exercisable at any time prior to 30 September 2016 at a price reflecting, inter alia, the discounted value of the management fee stream payable by the Company to FPM. The exercise price is subject to downward adjustment if certain financial and operational milestones related to Vikram Logistic and Maritime Services Private Limited are not achieved prior to 31 December 2015 or if other covenants are not satisfied. Upon exercise of the option by Barnet, Messrs. Tribone, Lulla and Venerus would no longer serve on the Company's board nor on the management team of its manager.

FPM has also agreed, effective from the date of completion of the Placing, with Infrastructure India Holdco, a wholly owned subsidiary of IIP and counterparty to the management agreement with FPM, that it will subtract from the Company's net asset value, for the purposes of calculating management fees payable to FPM, the proceeds of the Placing, to the extent such proceeds would increase IIP's net asset value. .

Related Party Transaction

As GGIC currently indirectly holds 51.17 per cent. of the Company's issued share capital, it is deemed to be a related party of the Company under the AIM Rules. As a result, the entry by the Company into the Subscription Agreement with Barnet, which is an affiliate of GGIC, constitutes a Related Party Transaction pursuant to Rule 13 of the AIM Rules for Companies.

The independent directors of IIP, being M.S. Ramachandran and Tim Walker, consider, having consulted with the Company's nominated adviser, that the terms of the Subscription Agreement are fair and reasonable insofar as Infrastructure India's shareholders are concerned.

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