After getting a show cause notice from the National Highway Authority of India (NHAI) for delaying the share transfer process in the Delhi-Gurgaon expressway, the current concessionaire DSC on Monday said the delay was on part of the prime lender IDFC, which is supposed to take over 74% in the project.
??The NHAI requested IDFC to conduct the due diligence process on an urgent basis so that the shares could be transferred at the earliest. However, three months have elapsed since the MoU was signed and IDFC is yet to execute the share transfer process,?? the company said in a statement on Monday.
The move comes after NHAI recently issued a show cause notice to DSC for terminating its contract to operate the project.
Both DSC and IDFC had entered into an MoU on December 18, 2012, agreeing to execute the share transfer process. Later, NHAI on January 30 approved a proposal allowing IDFC to buy a 74% stake in the expressway project from DSC. Of the remaining 26%, 24.8% was to be with DSC and 1.2% with the Jaypee Group. IDFC was to pick up the entire debt of R1,600 crore of DSC, so the 74% stake transaction was to take place for a token amount of R1.
DSC sources said that the company wrote to IDFC chief Rajiv Lall on March 12, 2013, seeking faster execution of the transfer process.
??The letter in detail cites the progress made by DSC, and seeks IDFC to take a decision soon on the deal,?? sources said.
A DSC spokesperson said that ??DSC has extended all possible co-operation to expedite the due diligence process by instituting a data room, placing all information and documents there and repeatedly inviting IDFC and its three appointed agencies to the data room to access the data. However, despite repeated requests, there have been no visits after February 8 and the agencies mentioned that they needed instructions from IDFC to do so.??
The DSC, while blaming IDFC for the delay, hinted that the latter probably wants to back out from the agreement, which may be detrimental to the project, commuters and the lenders. ??Any backing out now would be detrimental to the project and commuters and would also be against the financial interests of other lenders,?? the DSC said.
After taking over the project, IDFC was to give the day-to-day management of the expressway to Feedback Brisa Highways OMT, a 60:40 JV between Feedback Infra and Brisa. IDFC, in turn, owns a 24% stake in Feedback Infra.
