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IJM cutting stake in Indian highway concessionaire

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IJM cutting stake in Indian highway concessionaire Empty IJM cutting stake in Indian highway concessionaire

Post by Cals Tue 19 Nov 2013, 17:47

IJM cutting stake in Indian highway concessionaire
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com   
Tuesday, 19 November 2013 13:37
KUALA LUMPUR (Nov 19): IJM Corp Bhd is reducing its proposed stake in India-based highway concession firm Vijayawada Tollway Private Ltd (VTPL) to 89.8% from the originally intended 99.97%.

This is in line with India’s policy makers requirement on foreign ownership of concessions in the South Asian country.

In a statement to Bursa Malaysia today, IJM said it has signed a revised sale and purchase agreement (SPA) with vendor IDFC.  Under the revised terms, the National Highways Authority of India wants IDFC to hold a minimum of 10% of VTPL.

"The execution of the (current) SPA was mainly due to the conditional approval of the National Highways Authority of India for the revised acquisition that IDFC shall hold at least 10% of the issued and paid-up share capital of VTPL,” IJM said.

IJM already owns 51.02% in VTPL.  Under the revised SPA, IJM will only acquire 38.7% in VTPL from the India Infrastructure Fund (IIF)

This will result in IJM having 89.8% in VTPL.

The revised SPA  follows the original document signed on May 6, 2011. IJM had then signed an SPA to buy 48.95% of VTPL.

The 48.95% stake comprises IIF’s 38.78% and IDFC’s 10.17% in VTPL.

Had the acquisition materialised, the effective interest of IJM in VTPL would have increased from 51.02% to 99.97%.
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