IIP.L Regulatory News (IIP)

Infrastructure India plc

Trading Update

Infrastructure India plc, an investment company focused on India's Transport and Energy sectors, announces the following update on its activities ahead of the release of the Group's results for the year ended 31 March 2012 which is anticipated by the first week of August 2012.

Financial Update

The board of IIP (the "Board") expects to announce a Net Asset Value per Share of approximately £0.93 as at 31 March 2012 (30 September 2011: £0.88; 31 March 2011: £0.92).

On 28 February 2012, the Company announced that it had raised US$25 million (approximately £15.9 million) through a secured loan facility. The net funds have been used to provide finance to Vikram Logistic & Maritime Services Private Limited ("VLMS") in order to pay off an existing maturing unsecured debt facility and assist in funding its acquisition of Freightstar, as well as for the general corporate purposes of IIP.

The Board has been considering the current funding needs in order to secure the Company's working capital position (approximately £4 million over the next six months), repay its existing term loan (approximately US$27 million (about £17 million), if repaid prior to 1 September 2012), as well as provide further financing to VLMS for its pending acquisition and integration of Freightstar, and for the implementation of their combined business plan (estimated to be £15 - 20 million). In light of its review, the Board has reached the conclusion that the Company's cash resources are not sufficient to meet its short term funding requirements and has, therefore, concluded that it is necessary to undertake a fundraising exercise.

The Board has appointed a committee of independent directors (the "Committee") to evaluate and consider the Company's funding options including, but not restricted to, a placing of ordinary shares. The Committee is liaising with the Company's corporate advisors on this matter and a further announcement regarding progress of this is expected to be made along with the announcement of results.

Operational Update

VLMS

During the reporting period, VLMS has made progress towards implementing its project plan and construction on both the Chennai and Bangalore container terminals commenced in June 2012. While this was later than originally anticipated, the management team remains confident that these terminals will commence initial operations by the end of 2012, subject to the continued disbursement of construction financing from VLMS' lenders.

VLMS recorded lower revenues compared to the previous 12 month period as a result of having to relinquish a key customer as a result of competition issues, which has negatively impacted the company's liquidity position. Following IIP's further investment of, in aggregate, £9.6 million into VLMS to repay an outstanding unsecured debt facility in March 2012 and meet working capital needs, VLMS is currently negotiating additional debt facilities to allow for the acquisition and integration of Freightstar. VLMS is also working with its existing lenders to ensure that its remaining committed debt financing is disbursed as soon as possible.

A key development for VLMS is the proposed acquisition of Freightstar, which comprises the logistics business, related assets (including a Category I license from Indian Railways) and associated liabilities of ETA, announced in October 2011. While substantial progress on the transaction has been made, there are a few outstanding conditions still required for completion of the transaction. These include the receipt of a No Objection Certificate from VLMS' lenders and the completion of land acquisition by ETA for its proposed terminal facility in the National Capital Region. VLMS' management are working aggressively towards completion of the transaction.

SMHPCL

As announced in May 2012, the Shree Maheshwar Hydel Power Corporation Limited ("SMHPCL") received approval from the Ministry of Environment and Forests to commence filling the reservoir created by the dam to an elevation of 154 metres above sea level. Actual commencement of the filling of the reservoir has been delayed due to further activist petitions and the closure of a further round of promoter financing. The promoter hopes that the inter-ministerial supervisory committee required to oversee the filling will be appointed, and the necessary financing closed, in time for SMHPCL to use the flows from the 2012 monsoon to partially fill the dam and commence initial operations from the three completed turbines. Further updates on this will be announced as progress is made.

WMPITRL

The Group's investment in Western MP Infrastructure & Toll Roads Private Limited ("WMPITRL") has continued to make good progress since the toll road became fully operational in June 2011. With further adjacent segments due to become operational in the near future, traffic volumes on the road are expected to stay strong.

IHDC

Several of the small hydropower projects owned and operated by India Hydropower Development Company, LLC ("IHDC") benefited from better than average monsoon inflows last year and showed improved power production. IHDC has also commissioned the 4.5MW Sechi project in Himachal Pradesh and made advances towards completing the 4.0MW Panwi project which is expected to commence commercial operations in Q4 2012.

IEL

Following its acquisition of Indian Energy Limited ("IEL"), the Company invested £0.6 million in IEL to fund certain working capital needs. While the wind flow regime improved slightly at IEL's Gadag project over the previous years, production at the Theni project was adversely affected by issues related to the availability of Tamil Nadu Electricity Board's electricity grid. The Theni project is also experiencing delays in receiving payment for power supplied and IEL is actively working on resolving the issue. The below budget performance of Theni is not expected to have a material effect on the value of the Group's assets.

The Takeover Code

The Board has been advised by the Panel on Takeovers and Mergers ("Panel") that IIP is no longer subject to the UK City Code on Takeovers and Mergers (the "Takeover Code"). As a result, the provisions of Rule 9 of the Takeover Code governing controlling interests no longer apply to the Company. The Board has noted, however, the recent consultation paper issued by the Panel which, inter alia, proposes that all AIM listed companies registered in the United Kingdom, the Channel Islands or the Isle of Man should become subject to the provisions of the Takeover Code, as is the case for those companies listed on the Official List.

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