Gammon Infra to dilute stake in SPV; stock up

Mumbai based Gammon Infrastructure is in talks with PE players to dilute stake in one of its Special Purpose Vehicle (SPV) to raise funds. The company plans to raise Rs 500 crore by next quarter. It will raise Rs 300 to Rs 350 crore through a stake sale in a SPV and the remaining Rs 100 crore to Rs 150 crore through debt, said a source who did not want to be named.

Gammon Infra which has multiple projects pertaining to roads, ports & power is looking at two projects where it may dilute stake. ‘PE players are showing interest in the Mumbai Nasik Expressway project and the Vizag Seaport project’ according to the source.

The company plans to dilute stake in one of these projects depending on the valuations. Gammon Infra has also dropped plans of raising $100 million through a QIP. ‘The stock price has really not gone up as expected so the QIP option has been dropped’ said the source.

Gammon Infra currently holds 80% stake in the Mumbai Nasik Expressway project. It has commissioned 64 kilometers and the entire 100 kilometers will be completed in the last quarter of FY 11. The other partners in the SPV are Sadbhav Engineering Limited and B.E. Billimoria & Co. Limited.

In the Vizag Seaport project the company holds 74% stake & UK based Portia Management Services Limited is a partner. Gammon Infra has an asset portfolio of around Rs 8000 crore. It has multiple projects pertaining to road, power & port sectors.

The stock was at Rs 21.50, up Rs 1.35 or 6.70 per cent on the BSE. It touched a high of Rs 21.75 and low of Rs 20.15 in trade so far.