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The stock of HCC on Wednesday gained over 5 per cent, as it closes sale of Farakka-Raiganj Highways to Cube Highways for an enterprise value of ₹1,508 crore.
The shares of the company are currently trading at ₹5.50 apiece, up 6.8 per cent.
HCC Concessions Ltd, the infrastructure development arm of HCC Group, completed its 100 per cent sale of Farakka-Raiganj Highways Ltd to Cube Highways and Infrastructure II Pte Ltd. FRHL, which forms part of the main arterial highway in West Bengal, is among the largest Public Private Partnership (PPP) projects in India, with an enterprise valuation of ₹1,508 crore, comprising debt of ₹905 crore and an equity valuation of ₹603 crore.
Cube Highways is a platform controlled by I Squared Capital, Abu Dhabi Investment Authority and IFC.
The total expected pay-out of Rs.603 crore to HCC group includes cash pay-out of ₹270 crore , which combines equity consideration and contractor payments; ₹233 crore of hold backs to be released on the completion of dispute resolution with NHAI; and up to ₹100 crore of earnout is payable in 2023 contingent on traffic projections (the traffic in FRHL has already returned to pre-Covid levels).
Additionally, as part of the agreement with Cube, HCC Group will be entitled to a revenue share from FRHL over the entire concession period, which could be material in nature, and the details of which will be specified on completion of the ongoing conciliations with NHAI.
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