Corporate News | L&T quoted 12% gap funding for Hyderabad Metro project

Corporate News | L&T quoted 12% gap funding for Hyderabad Metro project
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First Published: Fri, Jul 16 2010. 11 23 PM IST
Updated: Fri, Jul 16 2010. 11 23 PM IST
Hyderabad: Engineering firm Larsen and Toubro Ltd (L&T) emerged the winner for developing the Hyderabad Metro rail after it sought the lowest funding from the state government for the Rs12,312-crore project.
While the government had offered a viability gap funding (VGF) of Rs4,853 crore, or 40% of project cost, L&T sought Rs1,458 crore, or 12% of the cost, Hyderabad Metro Rail Ltd (HMRL), the nodal agency for the project, said in a statement on Friday.
Viability gap funding is the money offered by the state government to make up for the shortfall between the cost of an infrastructure project and the money private investors are willing to spend.
A consortium of Transstroy Corp. of Russia, CR 18 of China and Bharat Earth Movers Ltd (BEML) had sought a VGF of Rs2,200 crore, or 18% of the project cost. The Reliance-Anil Dhirubhai Ambani group (R-ADAG) sought a VGF of Rs2,991 crore, or 25% of the project cost, HMRL said.
The Andhra Pradesh government had called fresh bids for the project last July after it scrapped the award of the project to a consortium led by Maytas Infra Ltd as it had failed to arrange the funds for it in time.
C.R. Sukumar
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Tata Steel sells 27% stake to Southern Steel Berhad
Mumbai: Tata Steel Ltd’s Singapore subsidiary NatSteel Holdings Pte. Ltd. on Friday informed the Bombay Stock Exchange that it has sold a 27.03% stake back to promoters Southern Steel Berhad, a Malaysian steel maker for $72 million.
The deal, which valued Southern Steel Berhad at $267 million, is part of the company’s strategy of restructuring its portfolio and reconsidering its positions in geographies where it does not have a majority control, the company said.
Tata Steel will continue to explore various growth opportunities in its southeast Asian business in future, it added. Tata Steel is trying to reduce its debt-equity ratio from 2.2 to 1.5, says Ravindra Deshpande, an analyst at brokerage Elara Securities Pvt Ltd, adding that it could look at more expansions in India as it has the iron-ore advantage.
On Thursday, Tata Steel had raised at least Rs1000 crore by issuing preferential shares and warrants to Tata Sons Ltd. Tata Steel shares on Friday closed 0.41% lower on the Bombay Stock Exchange at Rs509.20 each. The benchmark Sensex closed 0.26% higher at 17,955.82.
Harini Subramani
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First Published: Fri, Jul 16 2010. 11 23 PM IST