APAC: Cube to acquire one more highway from Hindustan Construction

09 October 2018 - 12:00 am UTC

I Squared Capital-backed Cube Highways is in talks with Hindustan Construction Company Ltd (HCC) to acquire one more road project from the developer, Inframation has learnt.

HCC is close to acquiring a 100% stake in Baharampore-Farakka Highways Ltd (BFHL), a source said.

Last month, HCC signed a definitive agreement with Cube to sell 100% of Farakka-Raiganj Highways Ltd for an equity consideration of INR 3.72bn (USD 51.3m).

According to the National Highways Authority of India (NHAI), in June 2010 HCC won the 101km design, build, finance, operate and transfer (DBFOT) project for the four-laning of the highway between Baharampore and Farakka in West Bengal state.

The BFHL is in final stages of construction and is likely to be completed in the next financial year beginning March 2019, a second source said.

The deal will be inked when the full project gets completed or nears completion as Cube has a mandate to invest in fully operational projects only, the first source as cited above said.

HCC declined to comment, while Cube did not respond to request for comment.

The total project cost of BFHL was INR 9.99bn with a grant of INR 3.9bn, according to the concession agreement.

The concession period is 25 years.

The project got delayed due to land acquisition and HCC received an arbitration award of INR 4.5bn from NHAI on account of the delay, HCC’s annual report said.

HCC started collecting toll from May 2014 on receipt of the provisional certificate of commencement. BFHL had a toll revenue collection of INR 1.6bn for the year ended in March 2018, as per the annual report.

As of 31 March, BFHL had total liabilities of INR 8.69bn and its net worth was INR 1.34bn, data from the annual report show.

BFHL reported a loss of INR 34m for the year ended in March as compared to a loss of INR 210m for the previous financial year.

During the last financial year, HCC Group reported more liabilities than assets. Its total liabilities were INR 182.2bn against total assets of INR 166.6bn, as per the annual report.

Cube Highways is a road platform formed by I Squared Capital and the World Bank’s International Finance Corp. It is backed by the Abu Dhabi Investment Authority and operates 1,300 lane-kilometers of highways in India.

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Hindustan Construction