IVRCL has entered into a binding agreement with Dubai based Utico FZC (Utico) to sell its equity stake in Chennai Water Desalination (CWDL) which is a subsidiary of IVRCL. The company has taken this step as a part of its Strategic Business Plan to monetize its BOT and BOOT assets. The transaction is expected to complete in 3 months subject to the approvals of Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), lenders and other applicable authorities and satisfaction of certain agreement related conditions. The 100% equity valuation of CWDL arrived for this transaction is around Rs 150 crore. EY acted as the exclusive M&A advisor to IVRCL for this deal.
CWDL is a 100 million litres per day (MLD) seawater desalination project located at Minjur in Tamil Nadu, developed based on reverse osmosis technology. The project is operational since July 2010, with a 25 years concession period under a Bulk Water Purchase Agreement (BWPA) signed with CMWSSB.
CWDL recorded a turnover / income of Rs 185 crore during the FYE 2013-14 which is 3.71% of consolidated turnover of IVRCL for FYE 2013-14. The net-worth of CWDL as on March 31, 2014 is Rs 24 crore which is 1.17% of consolidated net-worth of IVRCL as on March 31, 2014.
Utico is a company incorporated under the UAE laws, having its registered office in UAE. It is in the business of providing utility services in the middle east and its is the largest private utility in UAE specialized in Water and Power utilities, sewage and industrial effluent treatment plants and district cooling systems. Utico does not belong to any of the Promoter / Promoter Group / Group Companies of IVRCL nor is its related party.