The National Highways Authority of India (“NHAI”) had awarded a concession to IVRCL Indore Gujarat Tollways Limited (“IIGTL” / “Original Concessionaire”) (a special-purpose vehicle incorporated by IVRCL Limited) to develop and manage the four-laning of a 155.15 km stretch of National Highway 59 (from Indore to the Gujarat/Madhya Pradesh border) (“Project”). The Project envisaged a total concession period of 25 years from the appointed date of August 20, 2010.
Owing to persistent financial defaults (including post implementation of a debt restructuring scheme under the CDR mechanism and subsequently, under NHAI’s One Time Fund Infusion Scheme), the Senior Lenders (being a consortium of banks led by Bank of India) (“Consortium”) initiated the substitution process for the Concessionaire as per the terms of the Concession Agreement and the Substitution Agreement. Pursuant thereto, the Consortium floated a bid process under swiss challenge method with the bid of Adani Road Transport Limited (“ARTL”) as the anchor bidder.
The bid process culminated with ARTL emerging as the successful bidder whereafter ARTL incorporated an SPV namely, M/s Indore Gujarat Road Limited (“IGRL” or “New Concessionaire”) to substitute the Existing Concessionaire for the Project. With NHAI’s approval on the substitution and the financing availed by ARTL from YES Bank Ltd (“YBL”) for the purposes of the substitution, the parties executed definitive documents for successful implementation of the substitution.
The Firm advised ARTL during the entire bid process, the structuring of the steps involved for implementation of the substitution as well as in the negotiations with various parties involved (i.e. the Consortium, YBL and NHAI) for finalisation of the transaction documents. Given the divergent factors at play (such as obtaining the NHAI approval, issues relating to the Project, timing for funding the substitution and the financing being availed from YBL etc.), the Transaction entailed multiple rounds of negotiations with the various stakeholders and precise step sequencing for successful and timely substitution.
The transaction team was led by Abhishek Mukherjee, Partner; with support from Monil Chheda, Partner; and Parnika Jain, Senior Associate.
