GMR Infrastructure sells 51 % stake in road project in Karnataka

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GMR Infrastructure sells 51 % stake in road project in Karnataka

GMr Infrastructure has signed a share purchase agreement with its joint venture partners to divest its 51% equity stake in GMR OSE Hungund Hospet Highways Private Limited (GOHHHPL).

GOHHHPL operates the four laning of Hungund - Hospet section of NH-13, which is a 99 km highway in the state of Karnataka.  The GMR and Oriental Structural Engineers consortium won in 2010 the tender process for design, construction, development, finance and operation toll project with a concession period of 19 years.

The project, which cost was estimated at US$308 million, achieved commercial operations in May 2014.

The sale is envisaged in two tranches, in the first tranche Oriental Structural Engineers has bought a 14.99% stake of the project from GMR Group.

The tranche II will be completed post approvals from National Highways Authority of India, lenders of GOHHHPL and other closing conditions customary to such transactions.

Oriental Structural Engineers will pay around Rs. 850 million (US$12.7 million). This is the third major divestment in GMR Group’s roads portfolio.

 Grandhi Kirankumar, Corporate Chairman of GMR Group, said:

“This transaction once again signifies about the GMR Group’s commitment & ability to successfully implement its “Asset-Light-Asset-Right” strategy under challenging market conditions. We, at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets. Divestment of this asset will also reduce the debt as on March 22, 2016, by about Rs. 1,077.97 Crore (US$160 million) on a fully consolidated basis and also the said sale consideration of Rs. 85 Crore (US$12.7 million) would enhance the liquidity.” 

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