INDIA: The government of the state of Telangana has signed an agreement to buy Hyderabad metro PPP concessionaire L&T Metro Rail (Hyderabad) Ltd from Larsen & Toubro. This will bring the management of the network under the state’s full control, and enable L&T to focus on its core activities.
The Phase I network was developed by LTMRHL through a 35-year DBFOT concession awarded in 2010. The first sections opened in 2017, and the network now has three lines totalling 69 km and carrying about 450 000 passengers/day.
State-owned Hyderabad Metro Rail Ltd said the acquisition of 100% of LTMRHL from L&T would facilitate a closer strategic alignment between the existing Phase I and the proposed Phase II, ‘fostering seamless integration in planning, execution and service delivery’ with a unified approach expected to ‘strengthen and support the creation of a more cohesive, reliable, and commuter-friendly metro network’.
Mature infrastructure asset
Construction, energy and manufacturing group L&T said the Rs14.6bn share purchase agreement signed on April 29 represents a ‘value-driven monetisation of a mature infrastructure asset’ and is aligned with its broader strategy of exiting its development project portfolio and unlocking capital for redeployment in its core engineering and technology-led businesses.
IDBI Capital advised on the transaction and legal services were provided by Saraf & Partners.
LTMRHL debts of Rs135bn which were guaranteed by L&T will be refinanced with a guarantee issued by the state government.
‘This transaction reflects L&T’s continued focus on creating long-term value and strengthening its portfolio of core, technology-led businesses’, said L&T Chairman & Managing Director S N Subrahmanyan.
He said the Hyderabad metro ‘is a world-class asset and a good example of our ability to deliver large-scale infrastructure that transforms cities and improves quality of life. We are confident that under the stewardship of the government of Telangana, the project will continue to grow and create long-term value for all stakeholders’.