Welspun Acquires 49 Percent Stake In Chikhali-Tarsod Project
Welspun Enterprises Limited ("WEL" or "Company"), part of the US$ 2.3 billion Welspun Group, announced the expansion of its infrastructure development portfolio by becoming a sponsor to one more Hybrid Annuity Model (HAM) project.
WEL has acquired 49% stake in the Chikhali-Tarsod NHAI HAM project in the state of Maharashtra, from Vishvaraj Group ("VIL"). WEL will be the sponsor of this project, thus expanding its HAM project portfolio to five projects worth over Rs. 50 billion.
The consideration for this stake purchase is Rs. 83.3 million. The company has an option to acquire the remaining 51% stake as and when the regulator (NHAI) permits. The consideration for the purchase of the remaining stake is fixed at Rs. 86.7 million.
As per the Hybrid Annuity Model by NHAI, the project will have 40% financial support from NHAI. The debt component is estimated to be 48% of the project cost; and as a sponsor, the balance will be funded by WEL (apart from the equity of VIL). The EPC contract of the project will be executed by WEL. A more detailed overview of the project is given in the appendix.
Commenting on the developments, Mr B. K. Goenka, Chairman, Welspun Group said, "We are extremely focused on profitably growing our infrastructure portfolio and this transaction is another step in that direction. We continue to explore opportunities for value creation in the infrastructure space.
|Project Name||Four Laning of Chikhali — Tarsod (Package-HA) section of NH-6 from km. 360.000 to km.422.700|
|Estimated Project Cost - NHAI||Rs. 9.09 billion|
|Construction Period||910 days|
|Operation Period||15 years post-COD|
|Bid Project Cost||Rs. 10.48 billion|
|First-Year O&M||Rs. 40.1 million|
|Expected Fund Commitment from Sponsors||Rs. 1.3 billion|