SBI Macquarie Fund looking to exit Ashoka Buildcon's arm

Ashoka Concessions Limited (ACL), subsidiary of Ashoka Buildcon, is all set to see value unlocking. SBI-Macquarie Infra Fund is looking to exit from ACL and the process has already begun, said Paresh Mehta, CFO of Ashoka Buildcon.CNBC-TV18’s Nisha Poddar had broken the news in September 2016. SBI and Macquaire, through the fund, owned a 31 percent stake in the company, which they brought three years back in a Rs 2,500 crore deal.Mehta said Ashoka Buildcon has no intentions of buying the ACL stake and confirmed that the company is holding the remaining 61 percent and will continue to do so.According to Mehta ACL is Ashoka Buildcon’s holding company for Build–operate–transfer (BOT) projects and has a total 6 BOT projects which are operational.Mehta confirmed the total debt of ACL stood at Rs 3,700 crore currently and are not looking to sell any of its assets on a piecemeal basis.Below is the verbatim transcript of Paresh Mehta’s interview to Latha Venkatesh, Anuj Singhal, and Sonia Shenoy on CNBC-TV18.Latha: What should we understand with this rather difficult sentence that Ashoka Concessions is looking for new shareholders, that its current shareholders will sell-off, what is the meaning of this press release?A: Ashoka Concessions is a holding company for our BOT projects wherein we have SBI Macquarie as a private equity partner for the last four years. So, definitely as a private equity partner, and having a fund, we will require an exit in the near future. So, in the process of they being able to monetise their investment, we are facilitating the process of enabling them to identify an investor who could buy them.So, that is a process which we are running. We are starting a process of talking to potential investors who would be interested in buying the stakes and in that course if they feel and the company feels fine, we will take some investment also at ACL level depending on new projects which will be coming in.Latha: 39 percent of SBI Macquarie is up for sale, you are looking for new buyers you may also buy some?A: They are looking for new buyers; we at present have no intention of buying their stake.Sumaira: What is the valuation for ACL, is there anything that has been worked out on that front?A: Not yet.Sumaira: Ashoka Buildcon per se so far is not looking to sell any stake, the news is just that SBI Macquarie are looking for an exit, am I correct?A: Yes.Sumaira: So nothing will accrue to the listed entity which is Ashoka Buildcon?A: No, we continue to hold our stakes into ACL and develop assets under ACL.Latha: How many road assets are there under ACL, what money is it making?A: We have six BOT projects and two annuity projects under ACL and all the six BOT projects are operative and they are earnings tolls. On the annuity projects they are under development.Latha: How many annuity projects you said?A: We have two annuity projects. One annuity project with the state government of Tamil Nadu and one hybrid annuity project which we have recently won and we are almost in the process of closing the deal.Sumaira: As per the last Macquarie deal which was about 3-3.5 years ago, I think ACL had been valued at 2,500 crore, would it be close to that?A: Cannot say anything at this moment of time.Latha: Any funds you have shortlisted?A: Not yet.Latha: No sovereign funds, nobody has yet shown interest?A: Not yet. We will start the process now and whenever we have something definitive, we will keep the stock exchange posted.Latha: What was the last full year revenue of Ashoka Concessions and what is the nine month revenue?A: Ashoka Concessions we have not declared those income. So, we will be declaring those in March.Latha: You hold the remaining 69 percent?A: Yes.Latha: Well, in that case, it is a consolidated entity, you should be able to tell us the numbers?A: We will be reporting in March 2017. We have approximately collected revenues for nine months of around Rs 350 crore.Latha: So you would have the FY16 earnings as well, how did the company do?A: I would not be in a position to tell immediately.Latha: You have the revenue numbers of Rs 350 crore, would you have an earnings number, profit, EBITDA any other number for ACL for nine months?A: Not at this point.Latha: All the six BOT projects are making money?A: In the consolidation, yes. One of the projects is slightly stretched, but otherwise they are all in the consolidated making money.Latha: When will the annuity projects get completed?A: One of the projects we expect to get completed in next quarter and the hybrid annuity project should get started as soon as we see the appointed date. It is recently won project.Latha: What is the debt of the entity?A: The consolidated debt of ACL would be around Rs 3,700 crore.Latha: You have never tried to sell piece-by-piece any of the BOT projects?A: We don’t do that.Latha: Can we expect an announcement in terms of having found a buyer, any timeline?A: Not at this moment. We will probably as soon as we get responses and we get some definitive terms, we will definitely keep the exchanges posted.