RITES informed that its board has approved the closure of the joint venture agreement with BNV Gujarat Rail, subject to the further approval.
The announcement was made after market hours yesterday.The joint venture (JV) company named BNV Gujarat Rail was incorporated on 9 December 2016. The joint venture agreement was signed between RITES, Shapoorji Pallonji Roads and PCM Cement Concrete.
In the JV company, RITES held 26% stake while Shapoorji Pallonji Roads and PCM Cement Concrete owned 67.5% and 6.5% stake, respectively. The venture was formed for a period of 25 years.
The purpose of the agreement was the development and operation of Bhuj NaliyaVayor Rail Project under PPP model of Indian Railways.
Due to decision of BNV, not to proceed further with this project it was decided to foreclose the JV arrangement and RITES shareholding will be transferred, which will be subject to further approval, if any. No adverse impact is envisaged due to termination of this JV agreement as total amount invested so far is Rs 26 lakhs only, the company said in a statement.
Shares of RITES ended 6.52% lower at Rs 226.95 on Thursday, 19 March 2020.
RITES is a public sector enterprise (PSE) and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. The government's stake in RITES stood at 77.39% as on 31 December 2019.
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