Lenders mull selling 51 per cent in L&T Halol Shamlaji Tollway
Led by Allahabad Bank, lenders to L&T Halol Shamlaji Tollway (HSTL) — a subsidiary of L&T Infrastructure Development Projects (IDPL) — are looking to sell 51% stake in Gujarat road project and have mandated SBI Capital Markets (SBI Caps) to look for a buyer, an advertisement said. “The lenders now propose to undertake change in ownership and management control of the company by sale of 51% equity shareholding held by lenders under the strategic debt restructuring (SDR) scheme,” the advertisement added. The total project cost was Rs 1,305 crore — equity of Rs 261 crore and a rupee term loan of Rs 1,044 crore. After the special purpose vehicle (SPV) delayed loan repayments, lenders converted 51% debt into equity through the Reserve Bank of India’s (RBI) strategic debt restructuring (SDR) on July 21, 2016.
Meanwhile, Icra had said in a note in April that lenders have converted Rs 406 crore outstanding debt into equity. Following the conversion, the SPV’s outstanding debt stood at Rs 597.73 crore as on July 31, 2016. “The remainder of the project debt has also been restructured under the 5/25 flexible structuring scheme and the repayments commence only in April 2017. Nevertheless, the company has been making delayed interest payments accrued between the reference date and conversion date,” the note said. The conversion of 173 km long two-lane road to a four-lane divided road from Halol to Shamlaji on State Highway 5 in Gujarat was completed in April 2012 and is being operated on a build-operate-transfer (BOT) basis. The stretch is an alternate to the NH-8 section connecting Vadodara and Shamlaji, thereby bypassing the urban settlements of Ahmedabad, Gandhinagar and Himmatnagar, according to the project website.
Icra added in its note that since the beginning of tolling operations, the traffic volume witnessed in this stretch (in three of the four toll plazas) has been significantly lower than the initial estimates, due to presence of a significant alternate route, resulting in lower than anticipated cash accruals. “The alternate route was substantially improved by government of Gujarat into a competing road subsequent to award of the bid, leading to considerable diversion of traffic from the project stretch,” it explained.