In addition, HCC looks to raise another Rs 1,000 crore in a year’s time through a combination sale of land parcels, non-core assets and conciliation of claims. Dhawan SAID these funds would be invested for growing the company’s business.
With the sale of the Farakka Raiganj Highways project to Cube, HCC’s road portfolio will consist of the operational Bahrampore – Farakka Highway, which has another 18 months of construction work pending. Dhawan added the company plans to sell the asset once closer to completion, worth an enterprise value of Rs1300 crore. Once sold, this would mark HCC’s exit from the build operate transfer (BOT)-Toll model. “Our core construction business in engineering, procurement and construction (EPC). Once that achieves stability, we will look at BOT projects as a function of supplementing our EPC business.”
HCC’s current order backlog stands at Rs 16500 crore and it has set a Rs 6000 to 7000 crore order inflow target for the current financial year. Company executives said, with Rs 3500 crore worth of new orders won so far, they have met half of the target set.
Part of the road sale agreement, HCC Group will be entitled to a revenue share from Farakka Raiganj Highwavs over the entire concession period, the details of which will be specified on completion of the ongoing conciliations with National Highways Authority of India (NHAI). The enterprise value also excludes a structure section of the project, which was descoped by NHAI, and for which Cube has offered a contingent pay-out. “A successful closure with NHAI
in the coming months of its tolling right confirmation, would entitle HCC Group to additional consideration estimated at Rs 200 crore," the company said in its statement.