HCC Group to sell Baharampore-Farakka Highways to Cube Highways

HCC Group has signed binding terms with Cube Highways and Infrastructure V (Cube Highways) for 100% sale of Baharampore-Farakka Highways (BFHL) at an enterprise value of Rs.1,279 crore, implying an equity valuation of Rs.600 crore. In addition to the equity value, Rs.200 crore of earnout is payable in May 2024 contingent on achieving revenue thresholds.

Furthermore, HCON will be entitled to a material revenue share for the life of the concession. HCON will be securitising part of these future BFHL receivables via a loan of up to Rs.300 crore, resulting in a total liquidity to the Group of up to Rs.900 crore. BFHL has a balance concession period of -19 years. The transaction is subject to closing adjustments, customary due diligence and approvals, including from the NHAI. The financial advisor for this transaction is Edelweiss Financial Services.

BFHL is a 101 km highway which forms part of the main arterial National Highway 12 (earlier National Highway 34) in West Bengal connecting Kolkata and port of Haldia to North Bengal and North Eastern states of lndia. Out of 101 km, BFHL is currently tolling 90 km and the balance 11 km of Baharampore Bypass will be tollable post completion in Q4 FY23 which will increase the normal toll revenue by -45%.

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