Thursday, January 18, 2007

DS Constructions to receive Rs. 900 crores in private equity funding

Delhi-based infrastructure player DS Constructions is about to receive a funding of Rs. 900 crores mix of debt and equity. Part of the debt will be convertible into equity at a later date. The money will be used to fund the equity commitments of the company for the various BOT projects. ICICI Securities is the strategic advisor for the deal.

Three institutions are in fray for the deal, which include a leading Indian bank, a leading European bank and the alternative investment vehicle of a Hong Kong-based hedge fund. At $185 mn, this is one of the largest transactions in the Indian private equity space. Of the total amount, the company is picking up $135 mn right now and has an option to take up the remainder later. About 25% of the total ($35 mn) will be convertible to equity if DS Constructions decides to go for a listing. The company is being tentatively valued at $800-1,000 mn, based on revenues and projects at hand.

DS Constructions is a mid-size construction company. It recorded a turnover of Rs. 450 crores last year. The company has an order backlog of Rs. 4000 crores, primarily in the road sector. DSC has a 67% stake in a Rs. 1900 crore-expressway in Haryana. It is also executing two road projects of total value of Rs 740 crore in Uttar Pradesh. All these projects have achieved financial closure. In addition to these, the company has also been awarded two hydel projects adding up to 1260 MW and worth Rs. 6500 crore. The company is considering an IPO in 6-12 months to fund our power projects. In addition to roads and hydel projects, DS Constructions has also done a railway project on BOT. The company has recently formed a 80:20 JV with Munich Airport International to bid for airport modernization projects.

Read the article in The Economic Times.

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