An excavator operates at a construction site for a road in the Kalanki Chowk area of Kathmandu, Nepal. (Photographer: Sara Hylton/Bloomberg)

Dilip Buildcon Expects Debt To Reduce In FY19 After Rising 25% In Four Years

Construction engineering major Dilip Buildcon Ltd. expects debt to come down in the financial year 2018-19 after rising 25 percent in the last four years.

The company, which reported standalone debt of Rs 2,794 crore as of March 2018, will transfer debt worth Rs 4,000-5,000 crore to the Shrem Group of Companies, Rohan Suryavanshi, head of strategy and planning at Dilip Buildcon told BloombergQuint.

Watch the full interview here:

Here are the key highlights from the company’s annual meet:

Shrem Group Transactions:

  • Dilip Buildcon invested Rs 1,160 crore into 24 roads till FY18 which were sold to Shrem Group.
  • It has received Rs 570 crore in FY18 end and will receive Rs 610 crore in FY19 (Rs 120 crore in the second quarter and the rest in the second half) from Shrem Group, taking total cash inflow to Rs 1,180 crore.
  • The company will not invest anything incremental in road assets sold to the Shrem Group; it has invested Rs 1,160 crore into 24 roads till FY18 end.

Financial Closure And Equity Investments On Hybrid Annuity Model Projects:

  • The company won 12 new HAM projects in the recent times.
  • While it has achieved financial closure for three of them it is confident of getting financial closure for six projects within Q2 and the remaining three in Q3.
  • Overall 12 new HAM projects require equity investment Rs 1,320 crore (Rs 661 in FY19 and Rs 330 crore each in FY20 and FY21.
  • On a net basis (post receipt of money from Shrem Investment) FY19 investment requirement is only Rs 50 crore.
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