Reliance Industries Limited (RIL) on Thursday said Brookfield-sponsored India Infrastructure Trust (InvIT) would acquire East-West Pipeline for Rs 13,000 crore.
As part of the transaction, InvIT will acquire 100 per cent equity interest in Pipeline Infrastructure Private Limited (PIPL), which owns and operates the pipeline.
"Brookfield has filed the preliminary placement memorandum, in terms of which India Infrastructure Trust, an InvIT set up by Brookfield as sponsor and 90 per cent investor, will invest Rs 13,000 crore to acquire the East West Pipeline," RIL said in a statement.
Under the agreement, the reserved capacity of the pipeline would be reduced to 33 MMSCMD (million metric standard cubic meter per day) from the existing 56 MMSCMD.
Further, RIL would continue to be entitled to transport gas, either by itself or of any customers, free of cost against any outstanding unutilised capacity payments.
"At the current approved final tariff of Rs 71.66/MMBTU (million British thermal units), if the average volume of gas transported is 22 MMSCMD, RIL will not be liable to make unutilised capacity payments," it said.
RIL will be entitled to a significant participation in the net earnings of PIPL under the mechanism specified in the pipeline usage agreement.
RIL's current investment in preference shares valued at Rs 4,000 crore would continue and will be converted into equity at the end of 20 years.
Further, at the end of 20 years, RIL would have the right to acquire equity shares of PIPL held by the InvIT at an equity value of Rs 50 crore, said the statement.
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