Friday, 25 March 2016

Ramky nears sale of project to Essel

Hyderabad-based Ramky Infrastructure is understood to be in advanced stages of discussions with the Essel Group’s infrastructure arm, Essel Infrastructure, for selling Ramky Elsamex Hyderabad Ring Road project for an enterprise value of around Rs 260 crore, according to sources aware of the developments, reports Shubhra Tandon in Mumbai.


REL is promoted by Ramky Infrastructure, which holds a majority 74% stake in the project, and the remaining 26% is held by Elsamex, a Spanish engineering and construction company.
Hyderabad-based Ramky Infrastructure is understood to be in advanced stages of discussions with the Essel Group’s infrastructure arm, Essel Infrastructure, for selling Ramky Elsamex Hyderabad Ring Road project for an enterprise value of around Rs 260 crore, according to sources aware of the developments, reports Shubhra Tandon in Mumbai.
This build-operate-transfer asset was bagged by Ramky in 2007 on an annuity basis under the annuity scheme of the Hyderabad Metropolitan Development Authority. The project under a special purpose vehicle, Ramky Elsamex Hyderabad Ring Road (REL), was incorporated to design, construct, develop, finance, operate and maintain an eight-lane, access-controlled, 12.63 km expressway under Phase II -A programme in Hyderabad from Tukkuguda to Shamshabad.
REL is promoted by Ramky Infrastructure, which holds a majority 74% stake in the project, and the remaining 26% is held by Elsamex, a Spanish engineering and construction company.
According to sources, IDFC Alternatives has also had discussions with Ramky for buying out the project.
In a response to an email query, Essel Infrastructure said, “We would not like to comment on market speculation.” Repeated calls and messages sent to Ramky’s top management officials remained unanswered till the time of going to press.
The project has a concession period of 15 years, and included a 30-month implementation period. According to an Icra report, the total project cost was R390.47 crore. HMDA partly funded the project through a 20% grant that amounted to R66.50 crore. The balance project cost of R323.97 crore was funded through senior debt of R253.97 crore, subordinate debt of R25 crore and the remaining R45 crore through promoters’ contribution, which included R25 crore redeemable cumulative preference shares.
A June 2015 report from CARE Ratings noted that the project was completed and awarded provisional completion certificate (PCC) on March 31, 2010. The PCC was with retrospective effect from November 26, 2009, as a result of which it was eligible for a bonus for early completion. However, the final completion certificate came from September 16, 2010, following which the company invoked arbitration against HMDA. FE could not ascertain the latest status of the the arbitration.
REL registered annuity income of Rs 63 crore and a net profit of Rs 1.19 crore during FY15. In FY14, the company recorded an annuity income of Rs 63 crore and a net profit of Rs 0.73 crore. At last count, REL’s term loans and long-term bank facilities were downgraded to ‘D’ or default rating due to ongoing delays in debt servicing owing to the company’s tight liquidity position on account of delayed receipt of annuities and absence of support from the promoters.
The debt-laden Ramky has been trying to divest its road assets for over a year now. However, the exercise has remained very slow. In 2014, the company had signed a term sheet with the Ajay Piramal Group for the sale of three road assets, but the deal fell through.
In March last year, the company’s debt was restructured under joint lenders’ forum. Ramky’s debt restructuring package is R2,700 crore. Six lenders comprising State Bank of India, State Bank of Hyderabad, Punjab National Bank, IDBI Bank, ICICI Bank and Axis Bank participated in the restructuring.



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