KUALA LUMPUR: IJM Corp Bhd has set up an indirect wholly-owned subsidiary, IJM Dewas (Mauritius) Ltd, as the vehicle to invest up to 74% in a highway concessionaire in India.
In a filing with Bursa Malaysia yesterday, IJM said IJM Dewas (Mauritius) would take the stake in Dewas Bypass Tollway Pte Ltd, which will carry out the project to widen and upgrade the 19.8 km Dewas bypass road in Madhya Pradesh, India.
Dewas Bypass Tollway Pte Ltd was formed by IJM last month with an initial share capital of 1 million shares of 10 rupees each.
According to various reports last year, the state cabinet had agreed to spend a sum of 2.862 billion rupees (RM193.8mil) on the project, which involves converting the highway to a four/six-lane highway on a design, build, operate and transfer basis.
In its announcement last month, IJM said the concession agreement for the project was expected to be executed on Feb 27, 2017.
IJM’s infrastructure division already has three tolled highways in India - the 367km Rewa Tollway, 145km Swarna Tollway (which it is in the process of divesting for 10.03 billion rupees or RM678.7mil) and 79km Chilkaluripet-Vijayawada Tollway).
Of the well-diversified group’s businesses, infrastructure was the largest contributor to IJM’s profit before tax for the financial year ended March 31, 2016, at RM555.77mil.
The profit was largely attributable to the disposals and fair value gains on the remeasurement of its equity interests in Swarna Tollway Pte Ltd and Jaipur-Mahua Tollway Pte Ltd and a balance stake disposal in Trichy Tollway Pte Ltd totalling RM307.48mil.
But for the nine months ended Dec 31, 2016, the infrastructure business contributed the least due mainly to the one-off gains in the previous financial year – i.e. from the disposal of its 74% equity interest in Jaipur-Mahua Tollway and 70% equity interest in Swarna Tollway.
Did you find this article insightful?