Infrastructure developer IVRCL Ltd. has signed agreements with Cube Highways and Infrastructure Pte Ltd. of Singapore to sell its entire stake, valued at ₹726.18 crore, in two subsidiaries.
The company has “entered into share purchase agreements on December 19 with Cube Highways and Infrastructure Pte Ltd for sale of 100% equity stake in two subsidiary companies – Salem Tollways Ltd (STL) and Kumarapalayam Tollways Ltd (KTL),” IVRCL said in a release on Wednesday.
The transaction is expected to be completed by September 2018, subject to approval from the authorities concerned and lenders of the two subsidiaries and IVRCL.
The release said the value of IVRCL’s 100% stake is STL and KTL was ₹383.23 crore and ₹342.95 crore respectively. This is on the basis of the enterprise value of the respective companies subject to adjustments of financial indebtedness and working capital and expenses for upcoming major maintenance of each of the project.
KTL operates 48.5 km stretch between Kumarapalayam and Chengapalli, while STL operates a 53.5 km stretch between Salem and Kumarapalayam. Both the stretches, operated under build operate transfer (BOT) mode, are on NH-544 (earlier NH-47) in Tamil Nadu and are 20 year toll projects.
Cube invests in road and highways projects, along with select other infrastructure sectors in India. According to the release, IVRCL is looking for “the right investors to monetise” stake in five other BOOT projects to reduce the debt and improve its liquidity position. The five comprises the Chennai Water Desalination Ltd’s 100 mld plant, which started operations in 2010, and four toll road projects.
