GMR to offload 74% stake in expressway to IIF for `222 cr

September 18, 2013

By Trushna Udgirkar

 Company to slash debt by `459 crore following disinvestment
Infrastructure group GMR has decided to sell majority stake in one of its road projects named GMR Ulundurpet Expressways for a consideration of Rs 222 crore. The buyer- India Infrastructure Fund would then get to hold a 74 per cent stake in this project.This is their second such divestment in the roads portfolio and “in line with the asset right and asset light” strategy of the group, it said.

Divestment of this asset will help the company slash debt by about Rs 459 crore as on end of August this year on a fully consolidated basis, in addition to infusing equity funds of Rs 222 crore.

“This transaction signifies GMR Group’s ability to successfully implement its asset-light-asset-right strategy under challenging market conditions. We at GMR Group, continue to focus on creating liquidity and reducing our leveraged position as part of the strategy of churning of assets. The GMR Group will continue to focus in adopting this approach in other businesses as well,” said Madhu Terdal, group CFO, GMR Group.

The highway project operates the stretch between Tindivanam to Ulundurpet on National Highway 45 in Tamil Nadu, counting 73 km. Its commercial operations had begun in 2009.

“This investment is our first major acquisition and a step in the direction of implementing our road sector strategy of acquiring control of operational projects with proven traffic history. Given the uncertainty and delays in implementing under construction projects, we will continue our focus on acquisition of operating road assets,” said MK Sinham, managing partner and CEO of IDFC Alternatives. IIF is a fund managed by IDFC Alternatives.

Infrastructure focused fund IIF has a portfolio with existing investments in roads, ports, conventional and cleantech energy assets. Their investments span across entities that operate in the aggregate, over 1,878 km of roads in India and the fund further hopes to expand its road portfolio.

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