BackIVRCL puts up Rs4,000 cr assets for sale to ease debt burden
The assets for sale include road projects both operational and under construction and desalination plant in Chennai, says CMD
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Hyderabad: Cash strapped infrastructure major IVRCL Ltd has put up ₹ 4,000 crore worth of assets for sale and expects to come out of debt burden in the next two years once the sale is successful, a senior official has said.
IVRCL chairman and managing director E. Sudhir Reddy said the assets for sale include road projects both operational and under construction and desalination plant in Chennai.
“We will be selling the BOT (build-operate-transfer) projects and come out of debt in two years. The debt component on the main company is not much. On the Ebitda side there is profit in the company. We are servicing more of interest component (on the loans)," Reddy, told PTI on the sidelines of recently held annual general meeting.
Corporate debt restructuring empowered group had earlier approved the company’s proposal for a debt recast package of ₹ 7,300 crore. IVRCL is facing cash crunch due to economic slowdown, higher interest charges, and slower pace of execution of projects.
As part of debt recast, IVRCL is also eligible to get a fresh loan of ₹ 175 crore that can be used towards meeting working capital requirements besides getting ₹ 1,400 crore bank guarantees among other facilities.
IVRCL is currently engaged in discussion with Tata Group firm TRIL Roads Pvt. Ltd to offload three road projects. However, no binding term sheet has been signed by both the parties, he said.
Reddy said that IVRCL owns seven road projects, including three operational and expects ₹ 1.85 crore from toll collection daily once all the projects become operational.
The company holds a 75% stake in Chennai Water Desalination Ltd (CWDL), which invested around ₹ 600 crore to set up a 100 million litres a day seawater desalination plant in Chennai on a build, own, operate and transfer (BOOT) basis for 25 years.
The other 25% stake is held by Spanish partner Befesa Agua, which brought in the technology to purify sea water and convert it into potable water. IVRCL invested about ₹ 240 crore as equity, raising the balance money through debt.
IVRCL achieved a gross turnover of ₹ 4,305 crore for the 12 months period ended 31 March 2014 as against ₹ 3,759 crore for the previous fiscal year (9 months period). It suffered ₹ 717 crore loss during the last fiscal.
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