Infra.india Regulatory News (IIP)

9 August 2021

Infrastructure India plc

("IIP", the "Company and together with its subsidiaries the "Group")

Trading and Liquidity Update

Infrastructure India plc, an AIM quoted infrastructure fund investing directly into assets in India, provides the following update on trading and company liquidity.

The Covid-19 pandemic has had an unprecedented impact on businesses in India and IIP's largest asset, Distribution Logistics Infrastructure Limited ("DLI"), has sustained delays in construction and completion schedules, delays with regulatory approvals due to government bottlenecks and irregular and lumpy volumes as a result of 15 months of severe market turbulence. The most significant challenge for construction, particularly during the second wave of infections this year, was the reduced availability of labour.

Liquidity Update

DLI has optimised its cost base and restructured its loans with improved borrowing terms, as announced in June 2021. For some time, the Company has also been in discussions with a third party with regard to a wider restructuring, which would have provided additional liquidity to DLI and the IIP Group, and those discussions have now ceased. In the interim period, IIP has had to provide unforeseen financial support and funds designated for capital expenditure had to be diverted to working capital and debt servicing needs, which would have been replaced by the envisaged transaction.

As at 31 July 2021, the IIP Group had unaudited cash and cash equivalents available of $4 million, including certain cash receivables. This amounts to approximately 5-7 months of runway for the Group.

The Board is currently evaluating options and is exploring alternative sources of financing with third parties and further announcements will be made as and when appropriate.

Trading Update

The first calendar quarter of 2021 started well, with a rebound in consumer demand and an overall pick up in economic activity. However, a resurgence of Covid-19 hindered this recovery and although the disruption was less severe than 2020 due to localised and less stringent restrictions, the impact on demand and disrupted industrial activity - particularly due to a shortage of labour - was marked.

Work at the terminal in Bangalore was completed during the fiscal year, but customs approval remains outstanding due to current Government backlogs. Nagpur Phase II work received final regulatory clearance from Indian Railways in calendar Q4 2020, but market share has fluctuated due to aggressive discounting amongst operators. To counter this, DLI has entered into strategic agreements with third party terminals. Work in the NCR and at Chennai have been on hold due to local restrictions and construction activity at Chennai is expected to commence once financing is in place.

Throughout the period, DLI focused on optimising its cost base and restructured its loans with improved borrowing terms, including a moratorium on interest for 13 months from March 2021 and a moratorium on principal for 24 months from December 2020, as well as reductions in interest rate from 12% to 10%.

IIP's hydro assets performed as expected. There was some disruption to administrative functions and delays to PPA negotiations and offtake meetings for India Hydropower Development Company ("IHDC"), but overall the impact of Covid-19 has been limited. The impact at Indian Energy Limited ("IEL") was greater in 2020, with one wind farm project, Theni, experiencing lower consumption of power during lockdown. IEL responded by diversifying its customer base.

Further updates will be provided as and when appropriate and in the upcoming Annual Results.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

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