Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

IVRCL to Sell Gasfield Holdings to Fund Road Projects

Jan. 22 (Bloomberg) -- IVRCL Ltd., an Indian construction company, plans to sell its stake in five gas exploration blocks and use the proceeds to fund road-building projects.

The company, based in Hyderabad, plans to complete the sale in a “few weeks,” Chairman Sudhir Reddy said in an interview. IVRCL holds 25 percent each in three areas in Yemen and 20 percent each in two blocks in Egypt, through a subsidiary. The balance is held by Gujarat State Petroleum Corp., and two other partners, according to IVRCL’s annual report.

The stake sales will help the company raise funds for road projects as flagging revenue due to regulatory bottlenecks and the highest borrowing costs in Asia prevent them from bidding for new projects. IVRCL in September said it plans to invest 11 billion rupees over three years in four highway projects.

“It has come to a bit of a matured stage, where we thought we should sell out,” Reddy said. “We would like to hang on. But in today’s investment climate, we thought it would be better to exit.”

IVRCL’s shares gained 0.4 percent to 43.55 rupees at 10:51 a.m. in Mumbai. They have dropped 4.4 percent this month.

The company has invested 2 billion rupees in the gas projects. The ventures have discovered the fuel during exploration, “but it is not quantifiable,” Reddy said.

India’s central bank will lower its repurchase rate to 7.75 percent from 8 percent at a Jan. 29 review to spur growth, according to 11 of 14 analysts in a Bloomberg survey. The rate was last lowered by half a percentage point in April. Asia’s third-largest economy may expand as little as 5.7 percent in the year through March, the least in a decade, according to the finance ministry’s estimates.

“We are praying and hoping that interest rates come down soon,” Reddy said. “Until then, we have to survive by selling stakes in our projects. But with all players looking for exits, there are just too many sellers and not enough buyers.”

To contact the reporter on this story: Sharang Limaye in Hyderabad at slimaye@bloomberg.net

To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.