Companies

IVRCL inks pact with Singapore company to sell two subsidiaries

V Rishi Kumar Hyderabad | Updated on January 09, 2018 Published on December 20, 2017


IVRCL Ltd has entered into a share purchase agreement with Singapore-based Cube Highways and Infrastructure pte. Ltd for sale of 100 per cent equity in two subsidiary companies that operate two tollways in Tamil Nadu.

The agreement involves 100 per cent stake sale in Salem Tollways Ltd (STL) and Kumarapalayam Tollways Ltd (KTL) and the transaction is expected to be completed before September 2018, subject mandatory approvals and lender of these tollways and IVRCL.

The debt-burdened Hyderabad-based infrastructure company had earlier managed to strike a deal with TRIL, a Tata group entity, for sale of stake in these two highways along with another one also in Tamil Nadu. However, that deal could not go through as planned.

The value of IVRCL’s 100 per cent stake in Salem and Kumarapalayam Tollways is ₹383.23 crore and ₹342.95 crore respectively on the basis of enterprise value.

While KTL operates 48.5-km stretch between Kumarapalayam and Chengapalli under BOT toll mode and the project commenced operation in 2009, STL operates 53.5 km between Salem and Kumarapalayam and commenced operation in 2010.

Of late, Cube Highways has been investing in road, highway and infrastructure projects in the country.

IVRCL, which has been facing turbulent times due to debt and poor business, is seeking to monetise some more road projects, which it current has under its portfolio.

These include Jalandhar Amristsar Tollways Ltd, IVRCL Chengapalli Tollways, IVRCL Chandrapur Tollways Ltd, IVRCL Indore Gujarat Tollways Ltd and Chennai Water Desalination Ltd.

The company management had recently told Business Line that they were scouting for investors to monetise these projects aimed at reducing the corporate debt and improve liquidity position in the company.

Published on December 20, 2017
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