IVRCL Limited has entered into an agreement to sell its equity stake in Chennai Water Desalination Plant Limited to Utico FZC, UAE-based company specialising in water treatment and environmental services.
The total project cost is estimated to be Rs 550 crore and the 100 per cent equity valuation of the CDWL has been arrived at Rs 150 crore.
The infrastructure company has decided to divest stake in the project as a part of its strategic business plan to monetise its BOT and BOOT assets.
R.Balarami Reddy, IVRCL Group CFO, told Business Line, “The transaction is expected to be completed within three months before the end of the financial year, subject to approvals from Chennai Metropolitan Water Supply and Sewerage Board, lenders and other applicable permission and agreement related conditions.”
CWDL is a 100 million litres per day seawater desalination project located at Minjur in Tamil Nadu. The project based on reverse osmosis technology process, is amongst the largest such projects taken up by the private sector.
The project is operational since July 2010 and has a concession period under a bulk water purchase agreement. The CWDL recorded a turnover of Rs 185 crore during 2013-14, which is about 3.7 per cent of the consolidated turnover of IVRCL.
IVRCL shares closed at Rs 15.25, up 12 per cent.
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