After selling stake in Bangalore International Airport Ltd, debt-laden GVK Power and Infrastructure is scouting for buyers for its road assets.
The company has already initiated talks with investment bankers and consultants to oversee the sell-off process, multiple sources confirming the development said.
A GVK spokesperson, however, refused to comment and said: “As part of corporate policy we do not comment on speculative queries from the media.”
The infrastructure major currently has three highway projects in its portfolio — Jaipur-Kishangarh in Rajasthan, Deoli -Kota in Rajasthan and Bagodara-Vasad in Gujarat — totalling 275km. It has invested Rs 2,426 crore in the projects till date.
As on March 31, 2015, GVK’s debt stood at Rs 25,062 crore.
Confirming the development, a senior board member of an infrastructure company said on the condition of anonymity: “We are evaluating their Jaipur-Kishangarh Project in Rajasthan.”
A senior analyst of an investment advisory agency assisting GVK in the deal said: “The Jaipur-Kishangarh project is likely to yield the company maximum premium against the other two.” He, however, refused to share the current valuations of the three projects.
GVK Jaipur Expressway Pvt Ltd (GJEPL) is India’s first six-lane BOT (build-operate-transfer) road project and is part of the Golden Quadrilateral under the National Highways Development Project.
“The focus of the group continues to be debt reduction, and the move (to sell stake in road projects) is part of the company’s strategy to create liquidity by offloading assets,” another source said.
According to industry sources, the company is also looking to divest some of its 55% stake in Mumbai airport as well. However, it could not be independently confirmed.
GVK Power and Infrastructure Ltd recently announced a 33% stake sale in Bangalore International Airport Ltd (BIAL) to Canadian billionaire Prem Watsa’s Fairfax India Holdings Corp for Rs 2,149 crore, which is likely to bring down its debt by Rs 2,000 crore.
Delays in regulatory approvals, land acquisition problems and funding crunch have led to high borrowing costs, which have put pressure on highway developers. Another infrastructure major, GMR Infrastructure Ltd, recently sold a 51% equity stake in its 99-km highway project in Karnataka to joint venture partners to pare debt.
GVK is among India’s most debt-ridden companies. The others include Adani Power (Rs 44,840) crore, Lanco (Rs 39,890 crore), Suzlon Energy (Rs 18,035 crore) and Hindustan Construction Company (Rs 12,170 crore).