Canadian institutional fund manager, Caisse de depot et placement du Quebec (CDPQ), has bought a highway project in Odisha from highway developer Bharat Road Network Limited (BRNL) in a deal valued at about Rs 2,000 crore.
The BRNL highway project taken over by CDPQ is a 67 kilometre toll road project from Bhubaneswar to Chandikhole in Odisha. Sources close to the development told BusinessToday.In that the deal is valued between Rs 1,800 crore and Rs 2,000 crore.
Meanwhile, in a release on Thursday, BRNL said that the company along with its partners, has signed an agreement with India Highway Concession Trust, an infrastructure investment trust set up by CDPQ for the sale of a build operate transfer (BOT) highway project in the state of Odisha. BRNL is currently the largest shareholder, with a 40% stake in this project.
"The Share Purchase Agreement provides for the complete transfer of ownership of Shree Jagannath Expressway Private Limited -- the special purpose vehicle (SPV) engaged in the development, operation and maintenance of the toll road," BRNL release added.
A build BOT project involves construction of a highway project by a private developer after participating in competitive bidding undertaken by a government agency. The top bidder is then allowed to construct the asset and recover its investment by collecting toll on the project through the concession period. After the completion of the period, the project is transferred back to the government.
Bhubaneswar to Chandikhole toll project started in December 2011 with a concession period of 26 years.
The company aims at debt mitigation from the deal proceeds. Bajrang Kumar Choudhary, Managing Director, BRNL said, "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."
BRNL has a project portfolio worth Rs 6,800 crore with six operational BOT projects covering 2,095 kms across six states in the country.
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure, 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." CDPQ invests globally in financial markets, private equity, infrastructure, real estate and private debt.BRNL shares were trading with gains of 2.20 percent at Rs 34.80 on the National Stock Exchange.