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Finance | April 2014

Ashoka receives another investment in ACL

 By Rahul Kamat

Ashoka Buildcon Ltd's subsidiary Ashoka Concessions Limited (ACL), has received its 4th tranche of investment of Rs 133 crore, which will be utilised for equity investment in various under-construction projects. Ashoka Concessions Limited has received total investment of Rs 623 crore till date. It was last year, when Ashoka Buildcon transferred its seven BOT assets to a new entity Ashoka Concessions and roped in SBI Macquarie as a private equity investor into the same. SBI Macquarie agreed to invest Rs 700 crore in Ashoka Concessions for the stake of 34 per cent (or 39 per cent depending on the performance of a single BOT asset). Also, SBI Macquarie had committed Rs 100 crore towards any contingent requirement in the 7 BOT project portfolio, and further Rs 650 crore towards new BOT projects. Subsequently, Ashoka Concessions has added the Chennai Outer Ring Road project in its portfolio. It is believed that SBI Macquarie's additional commitment of Rs 650 crore towards new BOT projects enables Ashoka Concessions to bid and add projects worth Rs 6,500 crore to its portfolio, more than double the value of currently owned assets. After the deal, Ashoka Concessions, in JV with GVK, has added Chennai Outer Ring Road project worth Rs 1,400 crore, of which Ashoka Concessions' share comes to Rs 700 crore. Meanwhile, the PE deal has helped Ashoka Buildcon to address its own funding needs. Thanks to the stake sale of 34 per cent in Ashoka Concessions, Ashoka Buildcon seems comfortably placed to meet its equity commitment as well as cash shortfalls on account of losses, debt repayments, and premium payments arising from newly operational BOT projects.    

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