Infrastructure firms deleverage balance sheets through sale of road assets
ROADS & HIGHWAYS

Infrastructure firms deleverage balance sheets through sale of road assets

There is, reportedly, a recent trend following infrastructure construction firms as most of them are taking steps to monetise their road assets. 

The move highlights two primary facts, first, the ability of firms to deleverage and gain value arising from the sale and second, the investors’ interest towards the road assets. 

As reported, Singapore’s Cube Highways and Infrastructure took control of five hybrid annuity model (HAM) road projects that are under-construction through an agreement signed with Dilip Buildcon, which detailed the sale of 100 per cent stake in the projects. Additionally, in a separate agreement the construction company also recently sold its road projects to Mumbai based Shrem Group.  KNR Constructions too, entered into a share purchase agreement with Cube Highways for three of its road assets. 

In terms of financial stress faced by these infrastructure companies, the step is seen as a means of significantly reducing the same.  The sale of stakes releases all funds locked into the project and allows for it to be incorporated into future bids or as growth capital.  Asset monetisation is, therefore, a comparatively reliable means towards achieving stable growth. 

There is, reportedly, a recent trend following infrastructure construction firms as most of them are taking steps to monetise their road assets. The move highlights two primary facts, first, the ability of firms to deleverage and gain value arising from the sale and second, the investors’ interest towards the road assets. As reported, Singapore’s Cube Highways and Infrastructure took control of five hybrid annuity model (HAM) road projects that are under-construction through an agreement signed with Dilip Buildcon, which detailed the sale of 100 per cent stake in the projects. Additionally, in a separate agreement the construction company also recently sold its road projects to Mumbai based Shrem Group.  KNR Constructions too, entered into a share purchase agreement with Cube Highways for three of its road assets. In terms of financial stress faced by these infrastructure companies, the step is seen as a means of significantly reducing the same.  The sale of stakes releases all funds locked into the project and allows for it to be incorporated into future bids or as growth capital.  Asset monetisation is, therefore, a comparatively reliable means towards achieving stable growth. 

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