Ashoka Buildcon - Divestment Of BOT Toll Assets Removes A Big Overhang: Motilal Oswal
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Motilal Oswal Report
Ashoka Buildcon Ltd.’s subsidiary Ashoka Concessions Ltd. has entered into a share purchase agreement with Galaxy Investments II Pte, a KKR entity, for the sale of its entire stake in five toll assets for Rs 13.3 billion.
Of this, Rs 12 billion would be used to provide an exit to SBI Macquarie for its stake in Ashoka Concessions. Post regulatory approvals, the deal is expected to be closed by September 2022. SBI Macquarie’s exit has been pending for long and has been an overhang on the stock.
In the five projects – Ashoka Highways (Bhandara), Ashoka Highways (Durg), Ashoka Belgaum Dharwad Tollway, Ashoka Sambalpur Baragarh Tollway and Ashoka Dhankuni Kharagpur Tollway, Ashoka Concessions has invested Rs 21 billion (equity).
There would be a net impairment of Rs 5.5- 6 billion for Ashoka Buildcon from this transaction, which would be accounted for in Q3 FY22.
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