Welspun Enterprises updates on sale of road assets to Actis

Welspun Enterprises Limited ("the Company") had earlier executed definitive agreements with Actis Highway Infra Limited ("Actis") to exit from its operating road concessions portfolio ("Completed Highway Portfolio"), comprising 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 BOTToll asset (Welspun Infrafacility Private Limited).

In this regard, the Company has complied with all necessary Conditions Precedents (CP) and has obtained all necessary regulatory & statutory approvals for First Closing including National Highways Authority of India (NHAI), Public Works Department of Government of Maharashtra (PWD) and lenders for divestment of 100% stake in HAM assets and 49% stake in BOT-Toll asset ("First Closing"). Divestment of balance 51% stake in BOT-Toll asset shall be undertaken upon obtaining necessary regulatory and statutory approvals ("Second Closing").

The Cumulative Enterprise Value (Enterprise Value) value for the entire transaction stands at INR 5,853 Cr after considering the net current assets and other closing parameters. The Completed Highway Portfolio as on the date of First Closing has outstanding senior debt of INR 3,544 Cr including undisbursed debt of INR 59 Cr in BOT-Toll asset. It may be noted that the aforesaid EV excludes construction linked milestone/ grant payments of approximately amounts equivalent to INR 2,929 Cr already received and an amount of INR 267 Cr further receivable from NHAI and PWD. Hence, the value of the Completed Highway Portfolio stands at approximately INR 9,049 Cr.

Post this exit from Completed Highway Portfolio, the Company's road asset portfolio would comprise of two under construction HAM road projects (Sattanathapuram - Nagapattinam and Aunta - Simaria Road projects) which have a total project cost of INR 3,900 cr. The EPC order book, as of September 30, 2022, for the Company stood at a robust value of approximately INR 11,400 cr, comprising of INR 6,400 cr in water sector and balance INR 5,000 cr in road sector.

Commenting on this development, Mr. B. K. Goenka, Chairman, Welspun Group said, "This is one of the largest exit from our Group and fulfil our business model of capturing entire value chain of successfully winning-constructing-stabilizing-monetizing of Road Assets. We won one of India's first road HAM project in 2016 and during the last 5 years created a strong portfolio of over INR 12,000 cr in the road and highway sector. Our current unexecuted EPC orders of over INR 11,400 cr in both Road as well Water sector is a testimony of how we are leveraging our strong industry knowledge and experience to have a sustainable value accretive growth."

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

Shares of Welspun Enterprises Limited was last trading in BSE at Rs. 158.65 as compared to the previous close of Rs. 164.35. The total number of shares traded during the day was 77685 in over 1933 trades.

The stock hit an intraday high of Rs. 165.85 and intraday low of 153.50. The net turnover during the day was Rs. 12248849.00.

Source : Equity Bulls

Keywords

WelspunEnterprises INE625G01013 RoadPortfolio Operating Actis