HCC Group closed its sale of Baharampore-Farakka Highways Ltd (BFHL) to Singapore-based Cube Highways and Infrastructure V Pte Ltd (Cube) at an enterprise valuation of ₹1,323 crore, which includes SPV (Special Purpose Vehicle) debt of ₹646 crore.

HCC Group is to receive a total of ₹941 crore which includes upfront amount of ₹677 crore and ₹264 crore payable by Q3 FY24 and Q1 FY25 in two tranches, contingent on traffic projections. Additionally, as part of the agreement with Cube, HCC will be entitled to a revenue share from BFHL over the entire concession period, which is material in nature, said a press statement issued by the company.

25 years concession period

Baharampore-Farakka Highways is an SPV of HCC Concessions Ltd. It was incorporated on March 11, 2010 for Design, Build, Finance, Operate & Transfer (DBFOT) toll of the 4-lane highway between Baharampore and Farakka section of NH-12 (earlier NH-34) in West Bengal under NHDP Phase III. NHAI has granted a concession period of 25 years (extending to 30 years) to the company and BFHL commenced commercial (toll) operations on May 14, 2014.

BFHL covers 101km of the busiest section of Bengal’s main artery, NH-12, and passes through major towns such as Baharampore, Umarpur, and Dhuliyan. NH-12 provides north-south connectivity between the capital region/ports of Kolkata and Haldia to the North-eastern States of India. The west side of the highway borders Bihar and Jharkhand and the eastern side runs parallel to the Bangladesh border, where considerable import and export of goods occurs. NH-12 is the only viable route for commercial traffic over major rivers such as Bhagirathi, Ganga, Mahananda and Nagri in the region.

Furthermore, it forms part of the critical route to neighbouring Bhutan, Bangladesh and Nepal. The entire border region of West Bengal and Jharkhand is very rich in mining, while crushing is done at major towns like Pakur, Rampurhat and Nalhatti. Stone and related aggregates are supplied to the industrial towns of Baharampore, Kolkata, Dhanbad, Asansol, Durgapur, Jamshedpur in the south and Farakka, Malda, Dalkhola, Bangladesh and New Jalpaiguri in the north. The land-locked States in the North-East are heavily dependent on these nearby towns for industrial goods. Apart from this, other major commodities like agricultural produce, construction items, industrial goods, petroleum products, forest items, automobile and fishery products are supplied via NH-12.

“HCC is proud to have developed the backbone of West Bengal’s arterial highway on NH-12. Our concessions portfolio has been a value generator for the group and this asset sale underscores the material liquidity contribution toward our operations and growth,” Arjun Dhawan, Vice Chairman, HCC said in the statement.

The legal and financial advisors for this transaction were Cyril Amarchand Mangaldas and Edelweiss Financial Services Ltd, respectively.

The company’s scrip closed at ₹13.90, up by 8.85 per cent on the BSE on Wednesday.

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