Construction and EPC major IVRCL Ltd, which recently announced plans to restructure its business , is now seeking to churn its income-generating assets portfolio, including toll ways.
This could mean selling stake in some of the road assets, including toll ways, exiting some large water treatment projects or even inducting strategic investors. The entire exercise is aimed at bringing down the company's debt, which stands at Rs 2,400 crore currently , Mr E. Sudhir Reddy, Chairman and Managing Director, IVRCL , said.
In an exclusive interaction with
“Though we have not taken any decision on this, we will do so over the next few weeks. Ernst & Young are also working with us on this aspect,” he said.
Projects
“The company has five major income-generating projects — three of them toll ways — and a large water treatment project in Chennai, along with a self-funded golf course project near Chennai.
All of them are income-generating, barring the Golf project, where a Kotak arm is a strategic partner. By divesting stake, we will be able to bring down the debt burden by about a third,” he said.
“In addition, two more road projects would be commissioned next year. The idea to churn the portfolio is to bring down the debt and also access funds for new projects. While we will focus on EPC contracts, we will not shy away from bidding for PPP (public- private partnership) projects. Recently, we started taking up mining projects (as well),” he said.
“The general economic condition has been tough for corporate houses, including those in the infrastructure segment. The interest rates and input costs have gone up, along with labour costs. Access to funds too is getting harder and this is leading to margin pressure . The regulatory environment and clearances for projects too are hurting companies,” he said.