IVRCL on Thursday announced that it had entered into a binding agreement with Utico FZC of Dubai to sell its equity stake in Chennai Water Desalination Ltd (CWDL).
A joint venture between IVRCL and Befesa Aqua of Spain, CWDL is a 100-million litre a day seawater desalination project, located in Minjur, near Chennai. The 100 per cent equity valuation of CWDL, arrived for this transaction, is around Rs.150 crore, IVRCL said in a statutory filing. According to sources, IVRCL would get the proportionate value for the 75 per cent equity stake it holds in the joint venture. The remaining equity in the Rs.550-crore desalination project based on reverse osmosis technology is with the Spanish partner.
The stake sale to Utico is expected to be completed in three months subject to approval of the Chennai Metropolitan Water Supply and Sewerage Board, which in July, 2010, entered into a bulk water purchase agreement for 25 years with CWDL. The deal should also be approved by lenders and relevant statutory agencies. Utico, with its registered office in the UAE, is in the business of providing utility services in the Middle East. It is the largest private utility in the UAE, specialised in water and power utilities, sewage and industrial effluent treatment plants and district cooling systems. The filing said IVRCL was selling the stake as part of a strategic business to monetise its BOT and BOOT assets.
