HCC’s special purpose vehicles (SPVs) Baharampore-Farakka Highways and Farakka-Raiganj Highways entered into settlement agreements with NHAI for a comprehensive closure of all outstanding disputes and claims between the parties.
“The proceeds of conciliation shall be used to expedite completion of our key projects and to strengthen HCC’s participation in future works of nation-building,” Arjun Dhawan, HCC Group’s chief executive officer, was quoted as saying in the statement.
Shares of HCC were locked in a 5 per cent upper circuit at Rs 8.07 on Wednesday, driven by the news.
The Baharampore-Farakka Highways project will receive Rs 405 crore, while Farakka-Raiganj Highways will get Rs 854 crore from NHAI.
“Besides part use of funds for NHAI project completion and an exit to the Xander Group, who hold a 14.55 per cent share in HCON, a substantial portion of funds will be received by HCC as a settlement of their cost claim,” the statement said.
Farakka-Raiganj Highways will release the settlement proceeds and further sums to HCC Group, as a part of an existing contractual understanding with the asset’s buyer, Cube Highways & Infrastructure II Pte. Cube will release Rs 233 crre withheld as part of the deal, and will share a significant portion of the project’s revenue for the remainder of the concession’s 20 years.
The closure of the dispute regarding the Baharampore Farakka Highways will facilitate the required liquidity in the project to accelerate completion of a much-delayed bypass. This will help HCC monetise this Rs 2,000 core-asset earlier than planned.