HCC Concessions Ltd, a subsidiary of Hindustan Construction Company Ltd (HCC), has sold its annuity project in Andhra Pradesh housed under Nirmal BOT Ltd, to Highway Concession One Pvt Ltd for Rs 64 crore ($10.3 million), as per a stock market disclosure.
Highway Concession, a firm controlled by a fund under IDFC Alternatives, will acquire 74 per cent stake upfront while the remaining 26 per cent stake shall be acquired upon receipt of an approval from NHAI.
"This investment is in continuation with our road sector aggregation strategy of acquiring controlling stake in operating road assets. This acquisition also reinforces our intention to partner with sponsors with proven and long established track record in the sector and we look forward to continue working with the HCC Group in the future as well," said MK Sinha, managing partner & CEO of IDFC Alternatives.
Highway Concession is majorly held by IDFC Alternatives managed India Infrastructure Fund. The company was formed with the objective of acquiring and managing operating road assets and as on date, holds stake in two operating road projects.
Nirmal BOT was the first BOT project of the HCC Group which got completed in July 2009. It comprises 30 km road and connects Kadtal to Armur on NH-7 in Telangana. The total cost production was Rs 315 crore.
"This sale furthers our commitment to create value for shareholders. We take this great pleasure in strengthening our relationship with IDFC as we transfer the custody of this first PPP asset developed by the HCC Group," said Arjun Dhawan, president & CEO, HCC Concessions.
HCC Concessions, the infrastructure development arm of HCC Group, serves infra needs in the areas of transportation, power and urban infrastructure. The company is backed by Xander Advisors India which invested $54.31 million in July 2011.
In a parallel development, HCC said, Nirmal BOT has also received an arbitration award in its favour for Rs 16.67 crore which shall be payable to HCC upon receipt.
Shares of HCC closed at Rs 33.85 each, up 4.31 per cent on BSE in a weak Mumbai market on Friday.
(Edited by Joby Puthuparampil Johnson)