Welspun Enterprises has sold six operational road projects to Actis Private Equity for an enterprise value of Rs 60 billion, including liabilities, as it seeks to focus on the most competitive parts of its business portfolio.
Welspun’s deal with UK’s Actis covered two highway projects in Maharashtra, two in Uttar Pradesh linking to Uttarakhand, and two in Delhi. Five of the six toll roads have a hybrid annuity model, where the concessionaire gets a fixed pay-out from the National Highways Authority of India (NHAI).
The enterprise value of the six highway projects included a debt of Rs 36.27 billion and equity of Rs 23.73 billion. However, it did not include construction-linked milestone payments of Rs 30 billion received/receivable from NHAI and the Public Works Department (PWD) of Maharashtra. So, the six road projects sold by Welspun were valued at Rs 90 billion.
Including this deal, the Welspun Group, led by B K Goenka, has monetised assets worth Rs 190 billion in eight years. It is also evaluating the sale of its oil and gas business as part of its rejig strategy.
Welspun is left with two under-construction road projects, one in Tamil Nadu and the other in Bihar. Actis has the right of first refusal of these two assets as and when Welspun decides to sell them. The two projects entail a total cost of Rs 39 billion.
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