NCC, Gayatri Projects sell Western UP Tollway for Rs575 crore
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Mumbai: NCC Ltd, along with Gayatri Projects Ltd and its unit Gayatri Infra Ventures Ltd, has signed an agreement to sell 100% of their shareholding in Western UP Tollway Ltd to Cube Highways and Infrastructure Pte Ltd for Rs.575 crore.
NCC holds 51% and Gayatri unit holds 49% stake in Western UP Tollway. It cost Rs.755.68 crore to build the road, which started generating revenue from April 2011.
“The transaction is expected to be completed within two months on achieving the conditions agreed to between the parties. The transaction is taking place for an enterprise value of Rs.575 crore and is subject to certain closing adjustments,” NCC said in a statement on Wednesday.
Cube Highways is backed by global infrastructure investment manager I Squared Capital (ISQ) and International Finance Corporation (IFC), the private investment arm of the World Bank. Cube Highways has a portfolio of high quality transportation infrastructure businesses in India.
On 10 July, Mint had reported that ISQ had closed a $3 billion fund called ISQ Global Infrastructure Fund, and was close to finalizing its second investment in India, citing three unnamed people familiar with the matter.
In August 2015, I Squared Capital through its ISQ Global Infrastructure Fund announced its investment in Amplus Energy Solutions Pvt. Ltd.
Western UP Tollway is a special purpose vehicle formed to develop the 78km, four-lane Meerut-Muzzaffarnagar section of National Highway 58 in Uttar Pradesh under the National Highways Development Programme (NHDP).
In 2014-15, the turnover of Western UP Tollway to the consolidated accounts of NCC stood at Rs.108.05 crore, NCC said.
The implication on Gayatri was not immediately known.
Consultancy EY acted as the exclusive merger and acquisition advisor to the sellers on this transaction.
Gayatri Projects’ managing director T.V. Sandeep Kumar Reddy said the company, which was till recently backed by private equity firm AMP Capital, is looking at various options to monetize its operational roads portfolio.
A Gayatri spokeswoman declined to comment on the deal and did not disclose financial details.
The relaxation of government norms in 2015 allowing highway developers to fully divest their operational projects has helped speed up deal closures in the road sector.
Several Indian infrastructure developers, weighed down by debt, have announced exits from individual highway projects to monetize assets and repay creditors.
Dozens of assets across roads, power and renewable energy, and several others across ports and airports, are on the block. About $1.8 billion worth of equity was unlocked through the sale of road, renewables and port assets in 2015, according to data from Equirus Capital, an investment bank.