Gammon Infra to divest nine projects

Gammon Infrastructure Projects is an infrastructure project development company incorporated by Gammon India, to participate in the development of infrastructure projects on a public private partnership (PPP) basis.

Ltd, Mumbai Nasik Expressway Ltd, Vijayawada Gundu Golanu Road Project Ltd, Pravara Renewable Energy Ltd, Sikkim Hydropower Ventures Ltd and Aparna Infraenergy India Pvt. Ltd. Brookfield had come in as one of the two anchor investors along with Sumitomo Mitsui Banking Corporation two years in the first close of the fund. Kotak PE is yet to announce a final closure of the $250 million fund.

Gammon India has sold nine Indian project companies of Gammon Infrastructure Projects to a subsidiary of US asset management giant Brookfield Asset Management for a cash value of around Rs 563 crore of cash, reported Mint.

Among key terms of transaction, the company said the consideration towards equity comprises cash consideration of approximately Rs192 crore and an advance waiver of Rs285 crore.

Aggregate cash inflows for GIPL on account of divestment would be approx. Rs. Indeed, infrastructure focused funds were the top net investor among all alternate investment funds registered with securities market regulator SEBI in the second quarter of the year ended June 30, 2015.

The outstanding debt as on March 31, 2015 for these projects was Rs 1,718 crore and the net exposure of GIPL in the asset basket was Rs 415 crore.

Parent company Gammon India, which had a standalone debt of Rs.5,185.6 crore as on 31 March, entered into corporate debt restructuring (CDR) led by its lenders in September 2013.

Abhijit Rajan, CMD, Gammon Group said, “The transaction involving nine projects represents the largest asset sale at one go in the Indian infrastructure industry”.

Gammon managing director Kishor Kumar Mohanty meanwhile said that the transaction “allows us to get capital released from completed projects and improve financial position to explore new opportunities in the infrastructure space arising out of government’s new initiatives”.

Under an agreement signed on Thursday here, the consortium – BIF India Holdings Ltd – will take over the nine firms, which have six road projects and three power projects.