IVRCL to sell Rs1000 crore assets to reduce its debt

Q: Last year, company's Chairman said that the company had put Rs.4000 crore worth of assets on the block and was expecting to exit its debt troubles within 2 yrs.

Anirudh Patel, Mumbai

10th September 2015

Real estate News in Mumbai

real estate

real estate mumbai

road projects

jaypee group

ivrcl

ivrcl ltd

infrastructure business

road projects in tamil nadu

tata realty and infrastructure ltd

tril

jsw energy

gammon infrastructure projects ltd

road & power projects

thermal power plant in madhya pradesh

hydro power projects

Follow Discussion

Also see discussions for

Mumbai Real estate News Real estate News in Mumbai

Replies (4)

Good morning everybody!!!!
VRCL holds a 75% share in CWDL, while Befesa, a unit of Spanish energy, transportation and telecommunication conglomerate, Abengoa SA, owns the remaining 25%.

In its annual report for the year ended 31 March 2015, IVRCL noted that both sales were still in the discussion phase and expected to be closed soon.

Sudhakar , Chennai

11th September 2015

Comment

According to the consultant, talks with promoters are taking longer time than expected in a project. More large banks are actively pushing for sale of assets and driving it themselves because there is a decrease in value linked with infrastructure projects if it takes too long to sell them.

Vibhu, Lucknow

10th September 2015

Comment

The comany first signed a sale agreement with TRIL for 3 road projects, namely, Salem Tollways Ltd, Kumarapalayam Tollways and IVRCL Chengapalli Tollways Ltd., in March 2013. The deal could not be closed then because of some differences in valuation. The talks restarted earlier this year and the sale is expected to be closed by December and subject to regulatory approvals.

Daniel, Noida

10th September 2015

But it is good for the realty sector. Banks are taking an active role in selling possible projects of debt-laden infrastructure companies is probably the best way to address the current rot in infrastructure loaning.

When lenders run such asset sales, the best result for them hang together to be when they are take charge early and while the under-construction project is still commercially usable.

Ananya,

11th September 2015

@Ananya
It is seen that most infrastructure related property sales taking place currently are operational and generating cash flow or very close to completion,

Last December, IVRCL entered into a definitive sale agreement with Dubai based Utico FZC to sell India's first desalination plant, based in Chennai.

Anandraj Iyengar, Chennai

11th September 2015

In recent time, many of India's infrastructure firms have been selling assets to reduce debt. Their projects delayed by issues related to land acquisition, availability of fuel, financial crisis, a slowing economy and a combination of the four, these firms have had to organize differently its debt, mostly under the guidance of the banks concerned that the loans extended by them to these companies could turn bad.

Daniel, Noida

10th September 2015

Comment

True.....last month, Gammon Infrastructure Projects Ltd agreed to sell 6 road and 3 power projects to BIF India Holdings Pvt. Ltd for Rs.563 crore, taking advantage of a new government rule that has relieved the exit of developers of operational road projects. Gammon, which had a net debt of Rs.3947 crore as of 30th June,2015.

Rajatrawal, Mumbai

10th September 2015

Similarly, the Jaypee Group too has managed to sell many assets and reduced its debt by 1/5th. These sales include two hydro power projects which have been sold to JSW Energy for around Rs.9500 crore. The company is also in talks with JSW Energy for the sale of a 500 MW thermal power plant in Madhya Pradesh. As per the company's current report, the group's debt stands at over Rs.61000 crore.

Daniel, Noida

10th September 2015

It is heard that in July, 2014, a association of 20 banks led by State Bank of India approved a debt renovate package worth Rs.7350 crore for IVRCL, through the corporate debt restructuring cell. Under the package, the company also received fund and non fund based credit worth over Rs.2000 crore.

Ananya,

10th September 2015

Good Morning............Anirudh!!!
IVRCL Ltd, considered as one of the hottest company in the infrastructure business a decade ago and which fell on difficult times. The company is currently close to raising around Rs.1000 crore by selling some of its assets.

Rajatrawal, Mumbai

10th September 2015

Comment

It's true Rajat. The firm is looking to sell 3 of its road projects in Tamil Nadu to Tata Realty and Infrastructure Ltd. and a desalination plant to Dubai based water and utilities supplier, Utico FZC, by December. The fund raised from the sales will be used to reduce IVRCL's debt,

Ananya,

10th September 2015