Welspun Enterprises to exit from operational Highway Projects to Actis

Pursuant to the approval of the Board of Directors of Welspun Enterprises Limited ("the Company"), the Company has executed definitive agreements to exit its portfolio of operating road concessions ("Highway Portfolio") to Actis Highway Infra Limited ("Actis") for an aggregate Enterprise Value ("EV") of approximately Rs. 6,000 cr (Rupees Six Thousand Crores only). The Highway Portfolio comprises of 5 completed HAM assets (Welspun Delhi Meerut Expressway Private Limited, Welspun Road Infra Private Limited, MBL (CGRG) Road Limited, MBL (GSY) Road Limited, Chikhali Tarsod Highways Private Limited) and one operating BOT-Toll asset (Welspun Infrafacility Private Limited).

It may be noted that the aforesaid EV excludes construction linked milestone / grant payments of approximately Rs. 3,000 cr (Rupees Three Thousand Crores only) received/receivable from National Highways Authority of India ("NHAI") and Public Works Department of Government of Maharashtra ("PWD"), thus, valuing the Highway Portfolio being exited at approximately Rs. 9,000 cr (Rupees Nine Thousand Crores only).The Highway Portfolio as on the date of First Closing is expected to have a debt of Rs. 3,627 cr (Rupees Three Thousand Six Hundred Twenty Seven Crores only) and a total equity investment of Rs. 1,613 cr (Rupees One Thousand Six Hundred Thirteen Crores only). The completion of the above transaction is subject to completion of customary and regulatory compliances and approvals from NHAI, PWD, and lenders.

Post this proposed exit, the Company's road asset portfolio would comprise of two underconstruction HAM road projects (Sattanathapuram - Nagapattinam and Aunta - Simaria Road projects) which have a total project cost of ~Rs. 3,900 cr. The Company has a robust EPC order book of ~Rs 12,500 cr, comprising of ~Rs. 6,500 cr in water sector and balance ~Rs 6,000 cr in road sector.

Commenting on this development, Mr. B. K. Goenka, Chairman, Welspun Group said, "This is a landmark moment for the Company. We won India's first road HAM project in 2016 and during the last 5 years created a strong portfolio of over Rs. 12,000 cr in the road sector and Rs. 6,500 cr by way of EPC orders in the water sector, while leveraging our strong sector knowledge and experience. With this proposed transaction, we will deliver to our stakeholders the entire value chain of successfully winning-constructing-stabilizing-monetizing of Road Assets. Similarly, we will explore exiting the balance under-construction Road Assets and Oil and Gas Assets at the right time and at the right value."

Comments from Actis:

Mr. Adrian Mucalov, Partner, Head of Long Life Infrastructure at Actis said: "This is a strong, first of its kind, investment for ALLIF, which fully aligns with the fund's core objective - to invest globally in infrastructure assets that provide consistent yield for our investors."

Mr. Sumit Sen, Partner at Actis added: "We are pleased to deepen our commitment to India by supporting the development of some of India's most exciting infrastructure projects. The assets under the Highway Portfolio are well diversified and strategically located; they are a highly attractive addition to our portfolio that aligns perfectly with ALLIF's investment mandate. We look forward to pursuing similar long life infrastructure projects, including Welspun Enterprises' balance underconstruction Road portfolio, in line with our investment thesis."

Ernst and Young LLP acted as exclusive advisor for Welspun Enterprises Limited.

Shares of Welspun Enterprises Limited was last trading in BSE at Rs. 93.75 as compared to the previous close of Rs. 96.20. The total number of shares traded during the day was 18659 in over 703 trades.

The stock hit an intraday high of Rs. 97.45 and intraday low of 92.70. The net turnover during the day was Rs. 1771770.00.

Source : Equity Bulls

Keywords

WelspunEnterprises INE625G01013 AssetSale HighwayPortfolio Actis