NCC Limited to sell BOT assets to reduce debt

Hyderabad-based NCC Limited (NCCL) has decided to sell some of its build, operate and transfer (BOT) assets and other properties, including land parcels, to bring down debt on the company’s books.

The BOT assets of the infrastructure development company include five road projects, which have commenced commercial operations.

“We are looking at a strategic sale of two road projects and some real estate assets to reduce our debt, which is to the tune of Rs 2,225 crore,” company’s executive vice president (finance), YD Murthy, told Business Standard.

He said the company was currently holding discussions with potential buyers for the sale of two toll projects located in western Uttar Pradesh and Karnataka.  He was expecting the sale proceeds would be Rs 200-250 crore.

NCCL is also reported to have decided to exit from the two joint venture power projects in which it had made investments. While it is stated to have sold a 5  per cent stake in the 100-Mw Himachal Sorang Power Limited, discussions are being held with interested company's for a stake sale in the 1,320-Mw coal fire project at Krishnapatnam in Andhra Pradesh.

According NCCL managing director AAV Ranga Raju, the company expects a 10-15 per cent growth in both order book and topline in 2013-14. It had already received fresh order of Rs 4,814 crore.     

NCC had achieved a consolidated turnover of Rs 7,059 crore and a net profit of Rs 56.38 crore in 2012-13. Finance costs during the year stood at Rs 595 crore.

Despite the challenging environment, Raju stated in NCC's annual report that the company registered a 9 per cent rise in topline last year due to a reduction in establishment expenses and improvement in project execution and collections.   

In the current financial year, NCC reported a 71 per cent decline in its net profit  to Rs 5.8 crore for the first quarter as compared with a profit of Rs 20.33 crore in the corresponding quarter last year.