Kotak Fund set to acquire its first road asset

The Kotak Special Situations Fund (KSSF), the $1 billion investor in distressed assets, is close to taking control of Telangana-based HKR Roadways, an SPV building the 207 km Hyderabad-Karimnagar-Ramagundam highway. Hyderabad-based Gayatri Highways Limited controls a majority stake in the company, which will be taken over by KSSF. Reportedly, KSSF is taking control of the project by settling the company’s dues through a one-time settlement. The deal is likely to be completed by the end of May 2021. Banks are taking a 50 per cent haircut in this deal. HKR Roadways had signed an agreement for four-laning of the highway under the public-private partnership model, under which it was granted a concession period of 25 years including a 2.5-year construction period. The project started collecting toll from June 1, 2014. The total debt owed by the company is about Rs 15 billion and Kotak is settling by paying about Rs 7.5 billion. Gayatri Highways will remain a shareholder in the SPV but the majority stake will be held by Kotak.

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