On the road to paring debt...

Shubhra Tandon Posted online: Monday, Jul 21, 2014 at 0000 hrs
Mumbai : Close to 200 road projects, of the total 400-500 highway ventures being built via the PPP mode, could soon change hands as promoters look to monetise assets to pare debt, reports Shubhra Tandon in Mumbai. Promoters have been unable to infuse additional equity even as the economics of many projects has gone awry in a slowing economy. The total capital involved is an estimated R60,000 crore and immediate sales are likely for 14 road projects.

Consultants say deals could take place below book value. “Projects that were bid at aggressive traffic estimates could be sold at below book but there is no benchmark for valuations,” says Vishwas Udgirkar, senior director, Deloitte India.

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Recent deals include those of GMR selling a 74% stake in its Farukhnagar-Jadcherla expressway to SBI Macquarie for R206 crore — around 1.3-1.4 times book value — and 74% in its Ulundurpet Expressways to IDFC Alternatives for R222 crore — 1.12 times book value.