NCC in talks to sell road project
The two road projects are Western UP Tollways and Bangalore Elevated Expressway
By : DC Correspondent
Update: 2014-09-19 01:39 GMT
Hyderabad: With the investor sentiment improving in the country, city-based construction company NCC Ltd is talks to exit one of its four BOT road projects and expects to clinch a deal by the end of this year.“We are planning to exit two out of four BoT road projects. Out of two, we are currently in talks with potential buyers for one project and a deal could happen by the end of this fiscal,” said NCC executive vice-president (finance) Y.D. Murthy here.
The two road projects that the company is planning to exit are Western UP Tollways and Bangalore Elevated Expressway. After years of high growth, the Indian construction companies are scrambling to sell their BOT projects as high interest costs and low efficiency of their projects threaten to push parent companies towards severe financial strain.
NCC is not the only construction company that plans to exit its BOT road projects. IVRCL had said that it has put all its BOT projects on the block, Ramky Infra is also in talks to exit its road projects. GMR Infra, meanwhile, has terminated its contract to build around Rs 6,000 crore road project.
Apart from the monetisation of its road projects, NCC is going to pare debt from the proceeds of its upcoming rights issue. “We are launching our rights issue, which will open on September 29 and close October 17,” he said. Post rights issue, the company’s standalone debt will come down to '2,000 crore from the current '2,600 crore as the construction major looks at triming its interest costs.