BRNL sells expressway in Odisha to CDPQ-owned India Highway Concession Trust
Jan 21, 2021
Kolkata (West Bengal) [India], January 21 : Bharat Road Network Ltd (BRNL) and its partners have signed an agreement with India Highway Concession Trust -- an infrastructure investment trust set up by global institutional investor Caisse de depot et placement du Quebec (CDPQ) -- for the sale of a build-operate-transfer road project in Odisha.
BRNL is currently the largest shareholder with a 40 per cent stake in this project.
The share purchase agreement provides for a complete transfer of ownership of Shree Jagannath Expressway, the special purpose vehicle (SPV) engaged in development, operation and maintenance of a 67-km toll road project from Bhubaneswar to Chandikhole in Odisha.
The project operations started in December 2011 with an initial concession period of 26 years.
"The transaction is in line with BRNL's strategic plan for stakeholder value creation through portfolio assets reallocation while focusing on enhancing operational excellence and increasing financial efficiencies in existing assets," said BRNL's Managing Director Bajrang Kumar Choudhary.
"The transaction is expected to help BRNL in reducing its debts and will also provide the company with funds for reinvesting in its existing assets under construction," he said in a statement on Thursday.
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, said: "We are thrilled with the acquisition of Shree Jagannath Expressway. It will be the first asset integrated into the new CDPQ-owned roads platform in India which we set up and staffed in 2020. This reflects our long-term confidence and interest for the sector and more broadly the Indian infrastructure market."
The transaction is subject to regulatory approvals and other closing conditions.
With a marked recovery in commercial traffic on Indian highways to pre-pandemic levels, BRNL said the deal signals renewed focus on merger and acquisition activities.
The company is involved in the development, operation and maintenance of national and state highways in Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra and Odisha. It has a project portfolio worth Rs 6,800 crore consisting of six operational build-operate-transfer projects covering 2,095 lane km across these six states.
