NIIF negotiates with L&T to invest Rs 4k cr in Hyderabad metro

25 Aug 2021 CW Team

National Investment and Infrastructure Fund (NIIF) is negotiating with Larsen and Toubro (L&T) to invest Rs 4,000 crore in the Hyderabad metro project.

L&T's big investment in a single project has been suffering due to the cost and time overruns, and traffic loss more affected due to the Covid-19 pandemic.

The company talks to the Telangana government and the State Bank of India (SBI) to stabilise the financial assets. Further, the investment except through the convertible instrument will help the project debt of Rs 13,500 crore and refrain it by extending the loan tenors. According to the sources, NIIF's sponsors can also invest in the project but have not committed.

As per the sources, the company seeks a soft loan from the Telangana government of about Rs 5,000 crore.

Though it has declined the financial assistance of L&T earlier, the state government shall be considering the proposal to hint that it may help the company to raise finances from other financial institutions.

Instead of 180 days, the operations were closed for 169 days, due to which L&T was unable to invoke the Majeure. Besides, it has claimed Rs 5,000 crore for the delay in project execution because of the right of way issues and approvals.

Earlier this year, the company submitted a detailed financial analysis to Chief Minister K Chandrasekhar Rao. According to the estimates, on average, the operator has been making losses of Rs 5 crore each day while just earning Rs 1 crore each day. Till now, it has faced losses of about Rs 4,000 crore.

Director and senior executive vice president of L&T, Dip Kishore Sen, said that the company is planning to reduce its debt by incorporating extra investors. It will also talk to the government to permit real estate mortgaging rights and full the lease period to ensure transit-oriented development (TOD) monetisation.

The project's overall asset value is Rs 17,946 crore, from which Rs 2,439 crore is equity, while the remaining is debt. The company commissioned the project last year in February but got hit by the Covid-19 pandemic. With its daily passengers of about 700,000 to 800,000 to make the project viable, the company managed 400,000 before the Covid lockdowns, after which the project landed still since then limping to 160,000 passengers volume last month.

Image Source

Also read: UPMRC invites bids for underground section of Agra Metro’s Line-1

Also read: Kodambakkam-Poonamallee metro stretch to be ready by June 2024

National Investment and Infrastructure Fund (NIIF) is negotiating with Larsen and Toubro (L&T) to invest Rs 4,000 crore in the Hyderabad metro project. L&T's big investment in a single project has been suffering due to the cost and time overruns, and traffic loss more affected due to the Covid-19 pandemic. The company talks to the Telangana government and the State Bank of India (SBI) to stabilise the financial assets. Further, the investment except through the convertible instrument will help the project debt of Rs 13,500 crore and refrain it by extending the loan tenors. According to the sources, NIIF's sponsors can also invest in the project but have not committed. As per the sources, the company seeks a soft loan from the Telangana government of about Rs 5,000 crore. Though it has declined the financial assistance of L&T earlier, the state government shall be considering the proposal to hint that it may help the company to raise finances from other financial institutions. Instead of 180 days, the operations were closed for 169 days, due to which L&T was unable to invoke the Majeure. Besides, it has claimed Rs 5,000 crore for the delay in project execution because of the right of way issues and approvals. Earlier this year, the company submitted a detailed financial analysis to Chief Minister K Chandrasekhar Rao. According to the estimates, on average, the operator has been making losses of Rs 5 crore each day while just earning Rs 1 crore each day. Till now, it has faced losses of about Rs 4,000 crore. Director and senior executive vice president of L&T, Dip Kishore Sen, said that the company is planning to reduce its debt by incorporating extra investors. It will also talk to the government to permit real estate mortgaging rights and full the lease period to ensure transit-oriented development (TOD) monetisation. The project's overall asset value is Rs 17,946 crore, from which Rs 2,439 crore is equity, while the remaining is debt. The company commissioned the project last year in February but got hit by the Covid-19 pandemic. With its daily passengers of about 700,000 to 800,000 to make the project viable, the company managed 400,000 before the Covid lockdowns, after which the project landed still since then limping to 160,000 passengers volume last month. Image Source Also read: UPMRC invites bids for underground section of Agra Metro’s Line-1 Also read: Kodambakkam-Poonamallee metro stretch to be ready by June 2024

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