Gammon Infrastructure Projects said on Friday that it is divesting nine project companies to BIF Holdings Pte Ltd. The deal will result in a cash inflow of ₹563 crore for Gammon. It may also realise additional cash inflows of up to ₹100 crore upon completion of certain milestones.
Gammon has also decided to sell a 50 per cent stake in Vizag Seaport Pvt Ltd to Lastin Infrastructure Projects for ₹62.5 crore. After the deal, Gammon will own 23.76 per cent in Vizag Seaport.
BIF Holdings is jointly owned by Brookfield Asset Management Inc and Core Infrastructure India Fund Pte Ltd.
The nine project firms being sold are Aparna Infraenergy India Pvt Ltd, Sikkim Hydro Power Ventures, Pravara Renewable Energy, Kosi Bridge Infrastructure Company, Gorakhpur Infrastructure Company, Mumbai Nashik Expressway, and three road projects in Andhra Pradesh.
The road projects are Andhra Expressway Ltd, Rajahmundry Expressway Ltd and Vijayawada Gudugolanu Road Project.
Gammon Infrastructure is a subsidiary of Gammon India. The company, in a statement to the BSE, said that the consideration towards equity comprises around ₹192 crore and a waiver of advance of ₹285 crore. The special purpose vehicles (SPV) being taken over will repay the inter-corporate deposit of approximately ₹371 crore given by the parent to the SPVs.
According to a Gammon Infrastructure press release, six of the project companies are operational, one is under expansion, and two are under development.
Gammon Infra has said that the total project cost on completion of the asset basket is estimated to be ₹6,750 crore — ₹2,935 crore for six operational projects and ₹3,815 crore for the remaining three — of which ₹3,097 crore had been capitalised till March 31.
Debt reduction The outstanding debt for these projects at the end of the last financial year was ₹1,718 crore and Gammon Infra’s net exposure in the asset basket was ₹415 crore.
After the transaction, Gammon Infra’s consolidated debt will come down from ₹3,947 crore to ₹2,229 crore.
The release quoted Anuj Ranjan, Managing Partner, Brookfield, as saying the transaction represented Brookfield’s first major investment in Indian infrastructure.
Abhijit Rajan, Chairman and MD of the Gammon Group, said the deal represented the largest asset sale at one go in the infrastructure space.