GVK looking to sell assets to cut debt

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GVK looking to sell assets to cut debt

Infrastructure firm GVK Power and Infrastructure is looking to sell part of its infrastructure business in India.

The company is trying to sell its stake in the Jaipur-Kishangarh and the Bagodara- Vasad road projects and a stake in its airports business.

GKV is hoping to raise as much as Rs 1,200 crore (US$190 million) from the two road projects. Private equity firms such as SBI-Macquarie have shown interest in the projects.

Jaipur-Kishangarh Expressway is a 90 km long access controlled toll expressway connecting Jaipur, the capital of the Indian state of Rajasthan, to Kishangarh, the marble capital of the state. The expressway forms a segment of the NH-8 which is a part of theGolden Quadrilateral project, which itself is a part of the National Highway Development Project (NHDP). The expressway is six-lane and was inaugurated in April 2005.

Bagodara- Vasad project involves six-laning of 611.4 km in the State of Gujarat (India) on BOT basis. The project highway is a part of SH-8, which provides key connectivity to two national highways, NH-8A (Ahmedabad-Rajkot-Probandar), and NH-8 (Mumbai-Delhi). The project has a concession period of 27 years including construction period of 30 months.

Regarding the stake in the airports unit, a group of investors led by IDFC Private Equity is in initial talks with the company to buy a significant minority stake in its airports business for Rs 2,500 crore (US$400 million).

Sanjay Reddy, GKV's Vice-Chairman, stated:

The stake sale is being discussed at the holding company level for the airports business, IDFC can bring up to $150 million in the deal, while the rest will come from other investors.

Other PE and sovereign wealth funds have also shown interest in GKV's airports holding company, while Malaysia Airport Holdings Bhd was keen on buying a stake in Bangalore airport.

The firm looks to reduce its Rs 18,000 plus (US$2.85 billion) of debt on books. Both deals would help to achieve this objective debt. In the case of the airport business unit, the company is also looking at expanding its capacity.

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