BackIL&FS Transportation sells 49% stake in Gurgaon’s Rapid Metro
The equity stake in Rapid MetroRail Gurgaon Ltd sold for Rs509.9 crore
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Mumbai: IL&FS Transportation Networks Ltd (ITNL) on Thursday said it has sold 49% equity stake in subsidiary Rapid MetroRail Gurgaon Ltd to parent Infrastructure Leasing & Financial Services Ltd (IL&FS) for about ₹ 509.9 crore, in an effort to reduce debt.
IL&FS paid ₹ 17 per share for the stake in Rapid MetroRail, the subsidiary operating the Rapid MetroLink project, in a deal valued at about ₹ 509.9 crore, ITNL said in a BSE Ltd filing on Thursday. This deal represents 1.4 times the book value of the project, managing director K. Ramchand said on an analysts’ conference call.
The concession for the project was awarded to ITNL by Haryana Urban Development Authority in 2009 for a period of 99 years, including an initial construction period of two and a half years. The first phase of the project started operations in November 2013, spanning a 4.9 km track of elevated metro line connecting the Delhi Metro Sikanderpur station on MG Road to NH-8 in Gurgaon.
The second phase of 7-km-long rapid metro link from Sikanderpur to sector 56 in Gurgaon is under construction. The Rapid MetroRail project has a total construction cost of ₹ 1,088 crore, according to ITNL.
The project was earlier a joint venture between ITNL and real estate developer DLF Ltd, which eventually exited. ITNL held 82.8% stake in the project while subsidiary IL&FS Rail Ltd (IRL) held 18.2% prior to the transaction. The 49% stake was sold to its parent partly from ITNL and partly from IRL, Ramchand said.
The company is also in advanced discussions with financial investors to sell three to four of its operational road projects in an effort to reduce debt before the end of this fiscal year, Ramchand said.
For ITNL, the need to divest assets comes against the backdrop of rising debt. As of 30 September 2015, ITNL had net debt of ₹ 24,136.12 crore, as against ₹ 19,003.6 crore in September 2014.
ITNL has 31 road projects under annuity and toll models in its portfolio, of which 21 are operational. It is one of India’s largest build-operate-transfer (BOT) road operators, with exposure to national and state highways, urban roads, tunnels, flyovers and bridges.
ITNL on Thursday also reported higher-than-expected third quarter results.
Consolidated net profit for the quarter ended 31 December rose 23.3% to ₹ 159.07 crore from ₹ 129.06 crore a year earlier. Three analysts polled by Bloomberg had expected a consolidated net profit of ₹ 36.13 crore on net sales of ₹ 2030.60 crore.
The company has an order book of ₹ 14,000 crore as on 30 September, majority of which is under road projects. It plans to invest ₹ 1,500 crore over the next three years on its planned projects.
ITNL’s shares fell 2.7% to ₹ 70.40 on BSE Ltd on Thursday while the benchmark index Sensex closed at 22,951.83 points, down 3.4%.
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