Mumbai-based civil engineering firm Valecha Engineering Ltd is selling three road assets to US-based New Generation Infrastructure Inc, a subsidiary of New Generation Holdings Inc, for Rs 309 crore ($50.3 million), as per a stock market disclosure. The road assets are located in Madhya Pradesh and Gujarat.
New Generation Holdings is a global infrastructure and energy developer with a diversified resource type in solar, hydro, wind, and thermal.
The divestment of assets will help the firm to cut its debt, which was Rs 894.15 crore as on March 31, 2014 compared with Rs 717.99 crore last year.
The deal will involve Valecha Engineering's wholly-owned subsidiary Valecha Infrastructure Ltd, selling its stake in Valecha LM Toll Pvt Ltd, Madhya Pradesh and Valecha Badwani Sendhwa Tollways Ltd, Gujarat to New Generation Infrastructure. This is subject to receipt of regulatory and other third party approvals.
After the completion of proposed assets, Valecha Engineering will also be selling its shareholding in Valecha Infrastructure to the US-based firm.
Founded in 1995, Valecha Infrastructure is engaged in construction business and serves transportation and power sectors.
Established in 1967, Valecha Engineering is led by J.K. Valecha. The firm's construction portfolio includes roads, highways & expressways, bridges & tunnels, airports, irrigation dams, reservoirs & canals, railways, foundation & piling works.
The firm closed FY14 with revenues of Rs 706 crore with net profit of Rs 6 crore.
Shares of Valecha Engineering were trading at Rs 67.50 each, up 9.93 per cent on BSE in a strong Mumbai market on Monday at 12.59 PM. Its current market cap is Rs 132 crore.