SBI Macquarie Infrastructure Fund will exit Ashoka Buildcon’s build-operate-transfer (BOT) subsidiary Ashoka Concessions Ltd by the end of this fiscal.
In February this year, the Nashik-based highway developer had made public its plans of giving an exit to SBI Macquarie Infrastructure Fund, which held 39% stake in Ashoka Concessions.
Since then, the infra fund has been in discussions with various private equity players including Canadian Pension Fund to sell its stake in the subsidiary.
Jefferies was appointed as the investment bank to scout for buyers.
SBI Macquarie Infrastructure Fund is a joint venture between State Bank of India and Australia’s Macquarie Group.
“We and Macquarie are pursuing the process of getting an exit. There are various outrages also being explored simultaneously and we believe something significant should happen by March (2018),” said Paresh Mehta, Ashoka Buildcon’s chief financial officer, in an earnings call last month.
Ashoka Buildcon promoter and MD Satish Parakh told DNA Money, “The exit will be before March. There are various funds in the fray. Once the bidding process happens and when we are okay with the valuations, a final call will be taken.”
In 2012, SBI Macquarie had invested around Rs 800 crore in the company. As per media reports, the sale may fetch around Rs 2,000 crore to the fund.
Ashoka Concessions Ltd has eight highway projects in its portfolio, consisting a hybrid annuity project of Chennai Outer Ring Road and seven public-private-partnership or tolled road projects.
Meanwhile, Ashoka Buildcon is yet to sign the lease agreement with Mumbai International Airport Ltd (MIAL) to develop land around the international airport. It has already received Letter of Award from GVK-promoted airport subsidiary.
Ashoka Buildcon will be developing two land parcels near Mumbai’s Chhatrapati Shivaji International Airport for commercial as well as office spaces. Approximately 108,494 square metre of built-up area will be developed for an aggregate lease period of 49 years, for which it will pay a refundable security deposit of Rs 329.35 crore and annual lease rent of Rs 15.24 crore to MIAL with a provision of rent escalation by 15% every three years.
“We are in talks with them for certain clarifications and clearances which we require before we enter into the agreement,” shared Parakh during the earnings call. It will take another two to three months for the company to commence the project.
Ashoka Buildcon had posted a net profit of Rs 33 crore in the second quarter of this fiscal. The company’s total income including other income came in at Rs 390 crore during the quarter.
COUNTING GAINS
- SBI Macquarie Infra Fund had invested around Rs 800 crore in the company in 2012
- The highway developer had made public its plans of giving an exit to the fund in February 2017
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