Infrastructure development company KNR Constructions Ltd has agreed to sell its entire equity stake in two build–operate–transfer (BOT) road assets to an Essel group company.
The enterprise value of the two road assets – Patel KNR Infrastructure Ltd (PKIL) and Patel KNR Heavy Infrastructure Ltd (PKHIL) – is Rs 850 crore, KNR Constructions said in a stock market disclosure.
K Jalandhar Reddy, executive director of KNR Constructions, said the BOT asset sale is part of KNR group’s strategy to focus on its engineering, procurement, construction (EPC) business.
The transaction, which is expected to be completed within three months, is subject to approvals from lenders and National Highways Authority of India (NHAI), it said.
Essel group, promoted by Subhash Chandra, has presence in various sectors, including media, entertainment, packaging, infrastructure and education and technology, among others. The group's listed entities have a combined market capitalisation of over $6 billion.
Equirus Capital acted as transaction advisor to KNR Constructions for the transaction.
“The transaction is in line with the trend seen across the roads sector where institutional money is chasing operational cash flows and helping in debt reduction of infrastructure conglomerates,” said Ajay Garg, managing director, Equirus Capital.
Law firm Cyril Amarchand Mangaldas (Delhi) was legal advisor to KNR Constructions while Luthra and Luthra Law Offices advised the Essel group.
Early in September, a joint venture between KNR Constructions and BSCPL Infrastructure Ltd bagged a project for four-laning of the Hubli-Hospet section for Rs 2,293 crore.
In another transaction in the sector, in August, Singapore-based Cube Highways & Infrastructure Pte. Ltd, a joint platform of private equity firm I Squared Capital and International Finance Corporation (IFC), agreed to acquire a road project from IL&FS Transportation Networks Ltd for Rs 140.37 crore ($21 million).
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