HKR Roadways: Kotak Special Situations Fund acquires 74% stake
ROADS & HIGHWAYS

HKR Roadways: Kotak Special Situations Fund acquires 74% stake

Kotak Special Situations Fund (KSSF) on Wednesday told the media it has acquired a 74% stake in HKR Roadways Ltd, and funded the debt in the company for a one-time settlement with existing lenders for a total consideration of Rs 715 crore.

The Andhra Pradesh Road Development Corporation awarded a 25-year concession to HKR Roadways, a special purpose vehicle owned by a consortium led by Gayatri Group.

The four-lane toll highway project of the existing Hyderabad-Karimnagar-Ramagundam section of state highway-1 (SH-1) was under design, build, finance, operate, and transfer (DBFOT).

The 207 km toll highway project began operations in June 2014. However, due to right-of-way delays and significant underperformance of traffic compared to initial estimates, the account became a non-performing asset (NPA) with all lenders.

The existing consortium of HKR's lenders has approved a one-time settlement of all outstanding debts, subject to a Swiss Challenge auction. Following the payment of outstanding debts, HKR Roadways will no longer be a non-performing asset (NPA).

This is KSSF's first successful funding and debt resolution in the road sector. HKR requires additional capital expenditures to reach the commercial operation date, and we anticipate a turnaround in the coming years. As and when the rules are notified, KSSF will continue to offer a full cash settlement, which is a much better option than non-cash options, and is fully prepared to fund pre-packaged solutions under IBC .

KSSF is a SEBI-regulated alternative investment fund managed by Kotak Investment Advisors Ltd (KIAL), a subsidiary of Kotak Mahindra Bank that focuses on alternative assets. KSSF currently manages a $1 billion fund in India with a mandate to invest in special situations, credit, and distressed assets.

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Also read: Kotak Special Situations Fund set to secure Rs 700 cr road deal

Also read: Kotak to launch $800 mn infra fund to invest in projects across India

Kotak Special Situations Fund (KSSF) on Wednesday told the media it has acquired a 74% stake in HKR Roadways Ltd, and funded the debt in the company for a one-time settlement with existing lenders for a total consideration of Rs 715 crore. The Andhra Pradesh Road Development Corporation awarded a 25-year concession to HKR Roadways, a special purpose vehicle owned by a consortium led by Gayatri Group. The four-lane toll highway project of the existing Hyderabad-Karimnagar-Ramagundam section of state highway-1 (SH-1) was under design, build, finance, operate, and transfer (DBFOT). The 207 km toll highway project began operations in June 2014. However, due to right-of-way delays and significant underperformance of traffic compared to initial estimates, the account became a non-performing asset (NPA) with all lenders. The existing consortium of HKR's lenders has approved a one-time settlement of all outstanding debts, subject to a Swiss Challenge auction. Following the payment of outstanding debts, HKR Roadways will no longer be a non-performing asset (NPA). This is KSSF's first successful funding and debt resolution in the road sector. HKR requires additional capital expenditures to reach the commercial operation date, and we anticipate a turnaround in the coming years. As and when the rules are notified, KSSF will continue to offer a full cash settlement, which is a much better option than non-cash options, and is fully prepared to fund pre-packaged solutions under IBC . KSSF is a SEBI-regulated alternative investment fund managed by Kotak Investment Advisors Ltd (KIAL), a subsidiary of Kotak Mahindra Bank that focuses on alternative assets. KSSF currently manages a $1 billion fund in India with a mandate to invest in special situations, credit, and distressed assets. Image SourceAlso read: Kotak Special Situations Fund set to secure Rs 700 cr road dealAlso read: Kotak to launch $800 mn infra fund to invest in projects across India

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