Macquarie Infrastructure eyes Indian oil and gas pipeline assets

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The global slump in oil prices amid the coronavirus outbreak will push Indian state-owned firms to sell some assets, according to Macquarie Infrastructure and Real Assets, and the world’s biggest infrastructure investor is already in line.

“There is a fair bit of opportunity for the government to divest non-core oil and gas assets, like oil storage facilities, pipelines, transmission facilities,” Suresh Goyal who heads MIRA in India and Southeast Asia, said in a March interview. “With our investment platforms, local teams, we are well placed on capitalizing this opportunity.”

While he declined to share investment projections, MIRA raised about $61 billion in capital globally last year — the highest in the world based on data from Infrastructure Investor –and has poured $2.5 billion into India over the past decade. Attracting foreign investment is crucial to meet Prime Minister Narendra Modi’s goal of spending $1.5 trillion on new roads, rail links and other infrastructure over the next five years as public finances deteriorate.

Canada’s Brookfield Asset Management last year acquired Reliance Industries Ltd.’s East West Pipeline via an infrastructure investment trust for 130 billion rupees ($1.7 billion). The government plans to split GAIL India’s transmission business into a separate entity that it could sell to strategic investors. GAIL owns more than 70% of the country’s 16,800 kms pipeline network.

“India’s energy consumption is likely to grow 60%-70% in the next decade and a half, leading to a significant jump in petroleum products and gas consumption,” said Deepak Mahurkar, leader, India oil and gas industry practice, at PricewaterhouseCoopers LLP. “This is an important story for investors, especially the global private equity firms and infrastructure asset managers.”

MIRA set shop in India in 2009, and so far more than half its investment in the country has gone to the road sector. It is now looking to exit several investments, Goyal said, while declining to share details or returns beyond saying that they were “profitable.”

One concern, however, is how quickly and strongly the economy will recover from the coronavirus-led disruption, Goyal said. Another is banks’ increasing unwillingness to lend to the infrastructure sector. Indian lenders are battling the world’s worst stressed-loan ratio, with much of the soured debt in the infrastructure space. Banks’ lending to the sector, which includes power, roads, telecom, contracted by 1.8% in the first 10 months of the fiscal year ending March 31 compared with 10.8% growth a year earlier.

“The capital that we bring is in the form of equity but it does need the support of local banks for working capital,” Goyal said. “Hopefully measures taken by the government and the central bank will change things.”

Bloomberg

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.