IVRCL, the Hyderabad-based engineering, procurement and construction (EPC) company, is on a look out for buyers for two more of its highway projects, Jalandhar-Amritsar and Indore-Jhabua, as part of its debt reduction plan, industry sources privy to the development told FE. The company may also look at partial divestment of its 75% stake in the Chennai desalination plant, the country’s first such project, sources said.
The assets, sources said, will be divested as part of the company’s ongoing plan to raise R1,000 crore through sale of assets for reducing its high debt.
In April 2013, IVRCL signed a definitive agreement for selling three road assets to a Tata group company, 100% sale of these will garner around R525 crore for IVRCL. These assets sold to TRIL Roads Private, a 100% subsidiary of Tata Realty and Infrastructure, included Salem Tollways, Kumarapalayam Tollways and IVRCL Chengapally Tollways (ICTL) of total 154.83 kilometre, which are build-operate-transfer (BOT) projects.
IVRCL’s net debt at a consolidated level hovers at around R5,000 crore.
A spokesperson from IVRCL declined to comment on the proposed sale of additional assets.
However, sources say, the two highway projects that the company is now looking to exit involves improvement, operation and maintenance including strengthening and widening of the existing two-lane road to four-lane dual carriageway for a stretch of 49 kilometre in the Jalandhar-Amritsar section in Punjab. The other project, Indore-Jhabua, is 155 km-long and involves upgrading the existing road from two-lane to four-lane on NH 59 from Indore to Jhabua on the Gujarat-MP border.
The third asset, Chennai desalination project worth R500 crore, became operational in July 2010. The Chennai Sea Water Desalination Project was awarded by Chennai Metropolitan Water Supply and Sewerage Board in 2005 to set up a plant to purify 100 million litres of sea water per day and provide sea water treatment systems and underground storage tank in Minjur.