Infra India Plc fund purchases Freightstar assets

Kolkata: Infrastructure India Plc, an Isle of Man-registered, India-dedicated and LSE-listed fund, acquired on Monday Freightstar-branded railway logistics assets, including 11 box rails and a partially constructed terminal in Nagpur, from privately held Eta Engineering for GBP 9 million (INR 74 crore) in cash.

The contract follows 18 months of negotiation and was routed through 99.9% subsidiary Vikram Logistic and Maritime Services. It makes the fund one of the biggest privately held railway infrastructure providers in India.

The acquisition gives Vikram Logistic a right to a Category 1 licence from Indian Railways (IR) to operate container rails across the country, 46 acres of land for a planned terminal facility at Palwal in Haryana along with agreements to acquire another 24 acres.

“We imagine the terminal facilities of the combined entity to be fully completed between July and the end of 2013, with commercial operations ramping up proportionately from each of these facilities,” the fund told its shareholders.

The fund’s Chief Executive Officer (CEO) Mr. Sonny Lulla said, “We believe that the combined business will be one of India’s top three privately owned logistics companies, with the ability to offer state-of-the-art warehousing facilities and transportation across rail and road, whilst also benefiting from modest capital costs relative to its competitors.”

Apart from Freightstar assets, Vikram Logistic would get Eta’s fully-owned subsidiary Freightstar Private Limited. The latter has a joint venture (JV) with Mercurio Pallia Logistics, an automobile transportation company, to establish an automobile logistics park at Freightstar’s terminal in Nagpur.

Mercurio has an equal JV with Gruppo Mercurio of Italy and Pallia Transport. The JV will assist Freightstar enter automobile transportation using rail infrastructure.

Vikram Logistic has been undertaking yard management and handling operations at the Inland Container Depot (ICD) of Container Corporation at Whitefield in Bangalore and at the Chennai Port.