2024-05-03 23:14:57
New Delhi: Abu Dhabi Investment Authority (ADIA) and KKR have invested Rs 12,864 crore ($1.5 billion) in warehousing assets of Reliance Retail Ventures Limited (RRVL). According to sources, this investment is separate from the infrastructure investment trust (InvIT) that Reliance Retail Ventures Ltd had formed last year to hold about half of its retail warehousing assets. In March, RRVL had transferred its 11-12 million sq ft warehousing assets to Reliance Logistics and Warehouse Holdings (RLWH). RLWH was created in December 2022. In this, KKR and ADIA invested equally $1.5 billion. The transaction has not been formally announced yet. Sources said the purchase was funded through senior debt instruments worth Rs 7,075 crore, NCD-like instruments worth Rs 5,275 crore and equity investments. The operation and maintenance of these assets will be done by Reliance Projects and Property Management Services Limited (RPPMSL). It is a 100% owned subsidiary of Reliance Industries Limited (RIL). Both KKR and ADIA have invested in RRVL and Jio Platforms. Jio Platforms operates the digital and telecom businesses of Reliance. KKR and ADIA declined to comment. Reliance also did not answer the questions.
Special Purpose Company
In October last year, RRVL had transferred warehousing assets worth Rs 5,150 crore to an InvIT called Intelligent Supply Chain Infrastructure Trust. This is a special purpose company. However, SEBI had allowed RRVL to transfer only warehouses larger than 100,000 sq ft to InvIT. Assets smaller in size were to be transferred to RLWH, which is not an InvIT. Like the InvIT, the KKR and ADIA promoted company will also enter into long-term lease agreements with RRVL and its subsidiary Reliance Retail Limited (RRL) to ensure cash flow stability for at least 20 years. However, people with knowledge of the matter said it could be extended for a longer period. He said that in future the investment by KKR and ADIA could go up to $2 billion.