Ashoka Buildcon rose 3.70% to Rs 116.45 after the company entered into a share purchase agreement with India Infrastructure Fund (IIF) for acquiring 49% stake in Ashoka Highways (Bhandara) (AHBL).
The deal involves acquisition of 1,27,95,399 equity share held by IIF in AHBL along with zero interest shareholders loan for an aggregate consideration of Rs 35.98 crore.
Ashoka Highways (Bhandara) is a special purpose vehicle (SPV) and a step down subsidiary of Ashoka Buildcon, in which presently Ashoka Concessions, a subsidiary of Ashoka Buildcon, holds 51% stake (or 1,33,17,653 equity shares) along with other nominee shareholders and IIF. Ashoka Buildcon currently holds 9 shares in AHBL. Post completion of this transaction, the company along with subsidiary/ies would hold 100% stake in AHBL.
The said acquisition is being done to consolidate the road infrastructure business of the company, which is the core competence of the company as well as to provide an exit to IIF. The company expects to complete the acquisition by August 2021, subject to approvals from NHAI and if required, from the lenders.
The SPV was incorporated to execute the project awarded by National Highways Authority of India (NHAI), which involves construction, operation and maintenance of Chhattisgarh/ Maharashtra Border-Wainganga Bridge section of the NH-6 in Chhattisgarh and Maharashtra under NHDP Phase III-A on Build Operate and Transfer (BOT) basis.
The project was awarded in December 2006. The total cost of project was Rs 528 crore. The SPV has completed the construction of the road project in the year 2010 and since then collects toll. It reported a turnover of Rs 70.92 crore in FY2019-20.
Ashoka Buildcon is engaged in construction & maintenance of roads and supporting services to land support-operation of toll roads.
The company reported 172.91% jump in consolidated net profit to Rs 88.45 crore on a 1.96% rise in net sales to Rs 1305.49 crore in Q3 FY21 over Q3 FY20.
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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