Ramky Infrastructure Ltd. (RMKY), an Indian builder of roads and water projects, plans to raise 9 billion rupees ($146 million) by selling stakes in its highway projects.
“We are talking to prospective buyers for three projects,” Chairman A. Ayodhya Rami Reddy said in an interview in Hyderabad, where the company is based. “We are getting a good response as these are quality projects.”
Ramky is seeking to pare 28.4 billion rupees of group debt amid the slowest pace of expansion in a decade in Asia’s third-largest economy. Borrowing costs that are among the highest in the region’s major nations are also prompting the builder to raise money from the stakes. The company has “surrendered” road projects worth 40 billion rupees amid delays in getting land and environmental clearances, Reddy said.
Reddy expects to complete the asset sale within six months. Investors prefer projects that were already generating revenue to those that are being built, he said.
NCC Ltd. (NJCC), Madhucon Projects Ltd. (MDHPJ), and IVRCL Ltd. (IVRC), are among companies that have slowed bidding for projects in the South Asian country. Just 31 percent of the 239 road projects under the public-private partnership model have been completed, according to data on the website of the National Highways Authority of India.
“Banks are under pressure to recover their dues, and they are passing the pressure on to us,” Reddy said. “It’s a lose-lose scenario for everyone.”
Ramky’s shares jumped 4.4 percent in Mumbai to 47.50 rupees as of 9:24 a.m. in Mumbai, trimming losses in the past year to 55 percent, compared with a 6.8 percent gain in the benchmark S&P BSE Sensex. (SENSEX)
A planned $200 million initial public offering of group company Ramky Enviro Engineers Ltd. was scrapped last year.
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