DIVESTMENT POLICY

DIVESTMENT POLICY

1. Preamble

1.1. This Divestment Policy is adopted by the IM Board (in respect of, and on behalf of Oriental InfraTrust (“Trust”)) andsets out the divestment strategy and process in relation to the Project Entities of the Trust.

1.2. This Divestment Policy shall be effective on, and from the InvIT Closing Date.

2. Definitions

2.1. “Affiliate” shall have the meaning ascribed to such term in the Trust Deed.

2.2. “Applicable Law” shall have the meaning ascribed to such term in the Trust Deed.

2.3. “Associate” shall have the meaning ascribed to such term in the Trust Deed.

2.4. “Bid Process” shall have the meaning ascribed to such term in Paragraph 4.3.5.

2.5. “DivestmentPolicy” shall mean this divestmentpolicy adopted by the Investment Manager on behalf of the Trust, as amended from time to time.

2.6. “EHSS Policy” shall mean the environment, health, safety and social policy adopted by the respective entity, as amended from time to time.

2.7. “Environment and Social Action Plan” shall have the meaning ascribed to such term in the EHSS Policy.

2.8. “Environment, Health & Safety, Social Specialist” shall have the meaning ascribed to such term in the EHSS Policy.

2.9. “IM Board” shall have the meaning ascribed to such term in the Trust Deed.

2.10. “Investment Manager” shall have the meaning ascribed to such term in the Trust Deed.

2.11. “Initial Offer” shall have the meaning ascribed to such term in the Trust Deed.

2.12. “InvIT Closing Date” shall have the meaning ascribed to such term in the Trust Deed.

2.13. “InvIT Documents” shall have the meaning ascribed to such term in the Trust Deed.

2.14. “Mandatory Policies” shall have the meaning ascribed to such term in the Trust Deed.

2.15. “MBFS Unitholders” shall mean multilateral or bilateral development financial institutions or foreign government agencies or sovereign or sovereign related investors, if such entities, directly or indirectly, subscribe to and hold Units of the Trust issued pursuant to: (i) the Initial Offer; or (ii) any subsequent primary issuance of Units as per Applicable Law, provided that, at the time of such subsequent primary issuance, the relevant entity continues to hold Unit(s) of the Trust issued to such entity pursuant to the Initial Offer.

2.16. “Minimum Valuation” shall have the meaning ascribed to such term in Paragraph 4.1.3.

2.17. “MM Manager” shall have the meaning ascribed to such term in the Trust Deed.

2.18. “Person” shall have the meaning ascribed to such term in the Trust Deed.

2.19. “Project Agreements” shall have the meaning ascribed to such term in the Trust Deed.

2.20. “Project Manager” shall have the meaning ascribed to such term in the Trust Deed.

2.21. “Original Trust Deed” shall have the meaning ascribed to such term in the Trust Deed.

2.22. “Project Agreements” shall have the meaning ascribed to such term in the Trust Deed.

2.23. “Project Entity” shall have the meaning ascribed to such term in the Trust Deed.

2.24. “Project Entity Financing Documents” shall have the meaning ascribed to such term in the Trust Deed.

2.25. “Related Party” shall have the meaning ascribed to such term in the Trust Deed.

2.26. “Sale and Transfer Agreement” shall have the meaning ascribed to such term in the Trust Deed.

2.27. “Sanctions” shall have the meaning ascribed to such term in the Trust Deed.

2.28. “SEBI InvIT Regulations” shall have the meaning ascribed to such term in the Trust Deed.

2.29. “Simple Majority” shall have the meaning ascribed to such term in the Trust Deed.

2.30. “Sponsors” shall mean a reference to Oriental Structural Engineers Private Limited, a company incorporated under the laws of India, with corporate identity number U74210DL1971PTC005680 and having its registered office at OSE Commercial Block, Hotel ALOFT, Asset 5B, Aerocity, Hospitality District, IGI Airport, New Delhi – 110037, India (“Sponsor 1”) and Oriental Tollways Private Limited, a company incorporated under the laws of India, with corporate identity number U45203DL2008PTC184135 and having its registered office at OSE Commercial Block, Hotel ALOFT, Asset 5B, Aerocity, Hospitality District, IGI Airport, New Delhi – 110037, India (“Sponsor 2”) collectively, and “Sponsor” shall mean a reference to Sponsor 1 or Sponsor 2 individually and shall also include the Associates, Affiliates, Related Parties and nominees of each Sponsor.

2.31. “Trust” shall have the meaning ascribed to such term in Paragraph 1.1.

2.32. “Trust Deed” shall mean the trust deed dated February 25, 2019 executed by the Sponsors and the Trustee in accordance with Applicable Law through which the Original Trust Deed, stands amended, restated and superseded with effect from the Effective Date, and any other document which amends, supplements, replaces or otherwise modifies the Trust Deed in accordance with the InvIT Documents and Applicable Law, together with all annexures, schedules and exhibits, if any.

2.33. “Trustee” shall have the meaning ascribed to such term in Trust Deed.

2.34. “Unit” shall have the meaning ascribed to such term in the Trust Deed.

2.35. “Unitholder” shall have the meaning ascribed to such term in the Trust Deed.

2.36. “Valuer” shall have the meaning ascribed to such term in the Trust Deed.

3. Interpretation

3.1. Capitalised terms used, but not defined herein, shall have the meaning ascribed to such terms under the Trust Deed and other InvIT Documents, as applicable.

3.2. In case of any inconsistency between the terms of the Trust Deed and this Divestment Policy, the terms of the Trust Deed shall prevail.

3.3. Notwithstanding anything to the contrary contained in this Divestment Policy, all requirements relating to, or arising out of, the Mandatory Policies (including the EHSS Policy) and the Sanctions, shall be applicable until all MBFS Unitholders cease to hold Units of the Trust.

4. Disinvestment Mechanism

4.1. Divestment of aProject Entity

4.1.1. Any divestment, sale or transfer of the Project Entity shall:

(a) be in accordance with,or under, the Mandatory Policies and shall not be to any Person that is subject to any Sanctions;

(b) only be for cash consideration in accordance with Applicable Law and the InvIT Documents;

(d) shall be at a price higher than the valuation of the Project Entity as ascertained by the Valuer appointed in accordance with Paragraph 4.1.3 and in case of divestment of the Project Entity to a Person other than the Sponsor(s), shall be in accordance with Paragraph 4.3.4; and

(e) only be undertaken:(i) in case of a breach of Mandatory Policies by such a Project Entity in accordance withParagraph 4.2; or (ii) at the end of the term of the concession in respect of such a Project Entity or due to termination of the concession agreement in respect of that Project Entity in accordance with Paragraph 4.3.

4.1.2. All proposed divestments of a Project Entity shall be in accordance with Paragraph 4.1.1 and shall be approved by the IM Board. The proposed divestment, including the rationale for divestment, should be approved by the IM Board prior to the approval of the valuation as specified under Paragraph 4.1.3.

4.1.3. Upon the approval of the IM Board in accordance with Paragraph 4.1.2 above, the Investment Manager shall appoint any of the Persons set out in Annexure 1(List of Valuers), as the Valuer to ascertain the minimum valuation of the Project Entity being considered for divestment (“Minimum Valuation”), in accordance with Applicable Law and the InvIT Documents.For the purposes of any divestment of a Project Entity under Paragraph 4.3, the Valuer shall provide the IM Board with the Minimum Valuation of the Project Entity, with the following 2 (two) components: (a) minimum valuation, after assigning value to the tax credits of the Project Entity; and (b) minimum valuation, without assigning value to the tax credits of the Project Entity.

4.1.4. The Investment Manager shall make applications for key approvals and consents, as may be required by the Trust in relation to the proposed divestment,including, under the Project Agreements and the Project Entity Financing Documents.The Trust shall not be required to apply for or obtain any approvals on behalf of any Person to whom the Project Entity is divested, sold or transferred.

4.2. Divestment of a Project Entity due to a breach of Mandatory Policies

4.2.1. In the event that, any of the MBFS Unitholders determine that there is a breach of any Mandatory Policyby a Project Entity and such a breach is incapable of being remedied, cured or rectified, then such Project Entity may be sold or divested in accordance with Paragraph 4.1, Paragraph 4.2, Paragraph 4.3.5, Paragraph 4.3.6,Paragraph 4.3.7 and Paragraph 4.3.8 and may be at a valuation lower than the Minimum Valuation. In case of the divestment of a Project Entity under this Paragraph 4.2, the Sponsor(s) shall at no time be permitted to participate in the Bid Process as set out under Paragraph 4.3.5, if:(a) the Sponsor is acting as the Investment Manager,the Project Manager or the MM Manager responsible for such breach of Mandatory Policies by the Project Entity; or (b) a Related Party of the Sponsor(s), is acting as the Investment Manager, the Project Manager or the MM Manager, responsible for such breach of Mandatory Policies by the Project Entity.

4.3. Divestment of a Project Entity at the end of the term/concession period of the Project Entity or due to termination of the concession agreement in respect of that Project Entity

4.3.1. If the IM Board (acting for and on behalf of the Trust) decides to divest a Project Entity (a) at the end of the term/concession period of the Project Entity; or (b) due to termination of the concession agreement in respect of that Project Entity for breach of design capacity as per the concession agreement, such divestment shall be in accordance with the Project Agreements, the InvIT Documents and Applicable Law, and the Sponsors shall have the right of first offer in relation to such a Project Entity as set out under Paragraph 4.3.3. Provided that, the Sponsors shall have the right to make an offer under Paragraph 4.3.3 and be entitled to tax credits under Paragraph 4.3.8,only if the divestment is not (i) due to a breach of Mandatory Policies; or (ii) due to termination of the concession agreement due to a concessionaire default (as may be defined under the relevant concession agreement); and the Sponsor acting as the Investment Manager, the Project Manager or the MM Manager, or a Related Party of the Sponsor(s), acting as theInvestment Manager, the Project Manager or the MM Manager,as applicable, is responsible for such breach or termination, as applicable.

4.3.2. Subject to Paragraph 4.3.9, all processes for divestment of a Project Entity as provided in Paragraph 4.1 shall be followed in termsof inter alia obtaining the approval of the IM Boardand obtaining the Minimum Valuation.

4.3.3. At least 3 (three) months prior to the end of the term/concession of the Project Entity or within 3 (three) months from the date of termination of the concession agreement in respect of that Project Entity, the Sponsors shall have the right to make a bid / offer to the IM Board (on behalf of the Trust) for the acquisition of such a Project Entity. The bid / offer made by the Sponsors shall require approval of the Unitholders by Simple Majority in accordance with the Trust Deed. The Sponsor(s) shall make payment of the bid amount quoted by the Sponsor(s) less the value of tax credits assigned by the Valuer as per Paragraph 4.1.3.

4.3.4. In the event that:

(a) the Sponsors do not make a bid / offer to the IM Board (on behalf of the Trust) in respect of such Project Entity; or

(b) the Unitholders reject, or do not grant their approval by way of a Simple Majority in accordance with the Trust Deed to the bid / offer made by the Sponsors in accordance with Paragraph 4.3.3 above;

then, the Trust shall have right to divest the Project Entity to a Person other than the Sponsor(s) in accordance with Paragraph 4.3.5 for consideration which shall not be lower than the consideration offered by the Sponsors under Paragraph 4.3.3.

4.3.5. As a consequence of Paragraph 4.3.4, the Investment Manager shall adopt the Bid Process set out in this Paragraph 4.3.5, Paragraph 4.3.6, Paragraph 4.3.7 and Paragraph 4.3.8 for inviting offers from Person(s) interested in bidding for, and acquiring, such a Project Entity.

As per Paragraph 4.2.1 and this Paragraph 4.3.5, the Investment Manager shall adopt a competitive bidding process (“Bid Process”) for inviting offers from parties interested in bidding for, and acquiring, such a Project Entity. The framework for the Bid Process shall be determined by the IM Board on a case to case basis and should broadly set out the following:

(a) minimum number of bids to be invited;

(b) time period for receiving bids and completion of the Bid Process; and

(c) appointment of intermediaries, consultants and advisors (all of whom should be independent and should not be Related Parties of the Trust and the prospective bidder).

4.3.6. The Investment Manager shall prepare a detailed agenda for the meeting of the Unitholders, inter alia setting out the following details for the Project Entity proposed to be divested:

(a) brief description of the Project Entity;

(b) audited financial statements for the last 3 (three) years (if available);

(d) proposed utilisation of funds; and

(e) details of the Bid Process along with the identity of the successful bidder and the material terms of the proposed divestment.

4.3.7. Under the Bid Process, the highest bidder shall be the bidder that bids/offers the highest bid amount for the Project Entity; provided that, if the bid/offer made by the said bidder is lower than the Minimum Valuation of the Project Entity by the Valuer, then the approval of the Unitholders in accordance with the InvIT Documents shall be obtained to determine whether the award of the project should be to such bidder or new bids should be invited for the said Project Entity under a new Bid Process.

4.3.8. In case of divestment of the Project Entity to a Person other than the Sponsor(s) and only in the case the bid amount paid by such a Person is higher than the Minimum Valuation, without assigning value to the tax credits (as assessed by the Valuer under Paragraph 4.1.3. (b)), the Trust shall pay to the Sponsor(s) upon receipt of such sum from such Person, an amount equal to the minimum of:

(a) the value of the tax credits in respect of such a Project Entity, as assessed by the independent Valuer (corresponding to the difference of the two minimum valuation components (a) and (b) under 4.1.3), and

(b) the bid amount paid by such a Person reduced by the value of such a Project Entity as assessed by the Valuer under Paragraph 4.1.3 (b) i.e. minimum valuation, without assigning value to the tax credits of the Project Entity

4.3.9. Notwithstanding anything contained to the contrary in this Divestment Policy, any Project Entity which are to be transferred to the Sponsors or their nominees at their option pursuant to, and in accordance with, the Sale and Transfer Agreement, shall be transferred by the Trust to the Sponsor(s) or their nominees, as the case may be, without the requirement of any approval of the IM Board or the Unitholders under any InvIT Document.

5. Conflict with Law

5.1. The Divestment Policy shall not contradict with the provisions of any Applicable Law. In case of any discrepancy between the provisions of this Divestment Policy and Applicable Law, the provisions of Applicable Law shall prevail over the provisions of this Divestment Policy, only if the provisions of Applicable Law are more stringent than the provisions of this Divestment Policy.

5.2. Subject to Paragraph 5.1, this Divestment Policy will stand amended to the extent of any change in Applicable Law, including any amendment to the SEBI InvIT Regulations, without any action from the Investment Manager or approval of the Unitholders of the Trust.

6. Amendment

Other than as provided in Paragraph 5.2 above, any amendment to this Divestment Policy shall be undertaken with the prior written approval of the Unitholders by way of all the Unitholders.

Annexure 1

List of Valuers

1. Avendus Capital
2. Kotak Investment Banking
3. Credit Suisse
4. EY
5. Goldman Sachs
6. J. P. Morgan
7. KPMG
8. Morgan Stanley
9. Citibank
10. Deloitte
11. Mape Advisory
12. Jefferies
13. Rothschild
14. Standard Chartered
15. ICICI Securities
16. Axis Capital
17. Grant Thornton
18. Bank Of America ML
19. HSBC
20. JM Financial
21. Price Waterhouse Coopers
22. Deutsche
23. Nomura
24. UBS
25. Edelweiss
26. Ambit
27. BDO