BF Utilities subsidiary planning selling its stake in Bangalore Mysore Infrastructure Corridor (BMIC) to private equity fund JP Morgan Partners

Reports emerged Friday that BF Utilities’ subsidiary, Nandi Infrastructure Corridor Enterprises (NICE), is planning to dispose off a 10% stake in its infrastructure project, Bangalore-Mysore Infrastructure Corridor (BMIC) to JP Morgan Partners.

The sale will see a JP Morgan managed private equity fund take the stake in Nandi Infrastructure Corridor’s first Phase of the 164km tollway linking Bangalore and Mysore. It is believed that Enam Securities has been hired to act as merchant banker for the investment deal. Nandi Infrastructure Corridor’s project is pegged at between Rs 12,000 and Rs 15,000 crore.

If the reports are anything to go by, the announcements for the investment will be revealed in a few weeks’ time. Sources revealed that the announcement has been delayed by the Indian Supreme Court’s decision regarding a case on the project. However, it is expected that JP Morgan Partners’ private equity company will part with about Rs 500 crore for the 10% stake in the first phase of the project.

The reports further indicated that the two firms are due to sign the term sheet for the stake sell but an announcement won’t be made immediately till the courts decision is out. Even so, the reports would not reveal their sources, with BF Utilities reportedly declining to issue a statement over the speculations.

Currently, BF Utilities controls around 75% of Nandi Infrastructure Corridor Enterprises while the remaining 25% is held by Indian billionaire investor, Anil Ambani. Earlier on, BF Utilities had raised capital for the project from infrastructure lender, IDFC.

As such, the JP Morgan managed equity company will acquire its speculated stake in the first phase of the project, from its planned three phases. The Bangalore-Mysore Infrastructure Corridor project has a concession term of 40 years, inclusive of the ten years the construction is expected to take.

J.P. Morgan is a leader in financial services, offering solutions to clients in more than 100 countries with one of the most comprehensive global product platforms available. J.P. Morgan is part of JPMorgan Chase & Co., a global financial services firm with assets of $2.0 trillion.

On its part, Nandi Economic Corridor Enterprises Ltd (NECE) is a 64.77% subsidiary of NICE that has been assigned the right to develop the First Part of the BMIC Project. BF Utilities Ltd (BFUL) is a part of US$2.4 billion Kalyani Group. BFUL earlier operated in two business segments – Infrastructure Business and Investment Business.

13 Aug 2010.