Essel group buys out two highway projects of Patel Engineering, KNR

Patel Engineering Limited and KNR Constructions Limited on Saturday signed a share purchase agreement to sell their entire equity stake in two road buy, operate and transfer (BOT) assets to an Essel group company.
 

Both are operational annuity based BOT assets and have been awarded by the National Highways Authority of India (NHAI). The total enterprise value of both assets is Rs 850 crore.  The transaction is subject to certain conditions, including getting approval from lenders and NHAI, and parties anticipate that the tranaction will close within two to three months.

Ajay Garg, Managing Director of Equirus Capital said, “The transaction is in line with the trend seen across the road sector where institutional money is chasing operational cash-flows and helping in debt reduction of infrastructure conglomerates”. Equirus Capital acted as exclusive transaction advisors to the sellers on this transaction.

Apart from Equirus Capital, Cyril Amarchand Mangaldas (Delhi) were the legal advisors to the Sellers whereas Luthra and Luthra law offices represented the buyers.

Rupen Patel, managing director, Patel Engineering said the sale of these assets is part of the company's monetization plan to improve financial liquidity for ongoing operations. Company further intends to identify such quality assets and seek optimum value to strengthen overall cash flow position and would help in strengthening the balance sheet.

K Jalandhar Reddy, Executive Director, KNR, said the BOT asset sale is part of KNR Group’s strategy to focus on their EPC business and demonstrates their ability to build and construct good quality assets coupled with timely and efficient churn of invested equity which can be utilized as growth capital.

Patel Engineering Ltd is an integrated construction company specialising in hydro-power generation, irrigation and urban infrastructure projects. It is the only Indian company with experience in RCC, Micro Tunnelling and Double Take Tap Work. KNR Constructions Limited is also an infrastructure development company providing engineering, procurement and construction services across various sectors, like roads and highways, irrigation and urban water infrastructure management.