Dilip Buildcon to sell 24 road assets to Shrem Group for Rs 1,600 crore

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Mumbai | Published: August 25, 2017 5:28:53 AM

The sale is for 14 operational projects and 10 under-construction projects, for which DBL will receive about Rs 1,600 crore over the next two years.

Dilip Buildcon (DBL) said on Thursday it has signed an agreement with the Chhatwal Group Trust (Shrem Group) to sell 24 of its road assets.(Reuters)

Dilip Buildcon (DBL) said on Thursday it has signed an agreement with the Chhatwal Group Trust (Shrem Group) to sell 24 of its road assets. The sale is for 14 operational projects and 10 under-construction projects, for which DBL will receive about Rs 1,600 crore over the next two years. Six of these projects were recently awarded to the company under the hybrid annuity model (HAM). As of June 30, 2017, the company had already invested Rs 682 crore across all 24 projects. The company will continue to invest in the under-construction projects towards the equity portion that is required for the hybrid annuity projects. Under HAM, which was introduced in H2 of 2016, road developers need to invest 60% of the project cost (mix of debt and equity) while 40% is given as a grant by the government. Rohan Suryavanshi, director, strategy and planning, DBL, told FE the company would receive an additional Rs 4,000 crore over the next 15 years from Shrem for the operations and maintenance of the assets. “The projects already completed were part of a stable portfolio of annuity assets. For the projects that are under construction, we will continue to construct these and also maintain them, thereafter.”

DBL’s consolidated debt at the moment stands at about Rs 1,700 crore. Suryanvanshi said the company would repay its lenders as well as invest in bidding for more projects. He said, “We will take a decision shortly on how best to utilise the proceeds.” This is Shrem Group’s first foray into the roads sector. The Mumbai-headquartered company has two hotels in Goa — the Novotel Goa Shrem Resort Hotel and Grand Mercure Goa Shrem Resort. It has real estate projects in Mumbai, Alibaug and Karjat (in Maharashtra), Delhi and Neemrana in Rajasthan.

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