Transstroy Krishnagiri Tindivanam Highways Private Limited

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In May 2011, National Highway Authority of India (NHAI) awarded a 15-year concession (including construction period of 2years) to MBL Infrastructure Limited for the strengthening,improvement,two-laning, operation and maintenance of 182.182 kms of Krishnagiri-Tindivanam Road section of NH-66 from Km 37.600 to Km 214.110 in the state of Tamil Nadu. Under the contract, MBL was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road The scope included construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc.The expansion project, part of National Highway Development Project Phase-III, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Transstroy (India) Limited (74%) and OJSC Corporation Transstroy (26%), established Transstroy Krishnagiri Tindivanam Highways Private Limited, a special purpose vehicle to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by quoting the lowest fixed annuity of US$ 16mn (INR 800mn @50 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 400mn from NHAI during the term of concession. Transstroy India Limited would execute the EPC for the project. The concession agreement was signed on 14th July 2011. The project attained financial closure on 9th January 2012. The debt/equity ratio for the project was 65/35. The estimated capital cost of the project at the time of financial closure was US$ 112.3mn (INR 5615.5mn @50 INR/USD). Financing comprised of a 13-year term loan of US$ 73mn (INR 3650mn) and sponsor equity of US$ 39.3mn (INR 1965.5mn).The term loan had a repayment schedule of 42 quarterly instalments and was priced at 125 basis points over the Bank's base rate. The participating banks were Central Bank of India (INR1100mn), Andhra Bank(INR700mn), Corporation Bank(INR700mn), Indian Overseas Bank(INR450mn), Vijaya Bank(INR700mn). Construction on the project began in April 2012 (Appointed Date) and was expected to be completed by April 2014.