Sical Infra gets FIPB nod for $26mn funding

Sical Infra Assets, a 100% subsidiary of Sical Logistics, has received approval from Foreign Investment Promotion Board (FIPB) for investment in the company by Old Lane Mauritius IV Ltd, an investment vehicle of Old Lane India Opportunities Funds.

According to a release issued by Sical to the BSE today, the foreign equity participation by Old Lane is $26 million by issue of compulsorily convertible debentures (CCD), which will be subsequently converted into equity shares of Sical Infra.

"Sical Infra was formed to house the company's asset-heavy, capital-intensive, longer gestation infrastructure-based businesses like the road and rail terminals at Nagpur, Sical iron ore terminal at Ennore, the container rail project, the container terminals at Tuticorin and Chennai in joint venture with PSA Singapore as well as Sical Distriparks. The decision to segregate the short cycle, service- oriented businesses from the longer duration BOT type assets was aimed to crystallise the value of investments made by Sical into its special purpose vehicles (SPVs)," the release added.

Ashwin Muthiah, chairman, Sical Logistics, said: "The approval is a critical milestone in our efforts to build a balance between the asset heavy infrastructure side and the multi-modal logistics services of Sical. We will be using these funds, along with Sical's own infusion of $30 million, to complete the equity funding on all our existent projects that are already in different advanced stages of debt closure. It is our intention to build and deliver on these heavy assets by focusing on good project management and timely completion as they have a gestation of 16-24 months each and will be developed simultaneously. We have the right people skills in place, and I envision 2010 being a year of quantum leap in volumes and profits."