Era ties up Rs1,275 crore debt for highway project

New Delhi-based Era Infra Engineering has tied up debt for its Rs1,723 crore highway project in Uttar Pradesh, said chief financial officer Joy Saxena.

The 151km stretch on National Highway-24 runs between Bareilly and Sitapur.

The project has a debt-equity ratio of 74:26, which makes the debt portion Rs1,275 crore.

“Two institutions have agreed to underwrite the loan and we will wrap up the process in a week or so,” Saxena said.

Though Saxena refused to divulge the names of the underwriters, a person in the know said SBI Capital Markets and Union Bank of India could be the ones.

Era had bagged the 4-laning build-operate-transfer (BOT) project on toll basis in consortium with Russian firm OJSC-SIBMOST in May. Era holds 74% and OJSC the rest in the project, which has a 20-year concession including a construction period of 30 months.

“The equity component will come partly from internal accruals and partly through fundraising,” said Saxena. Era is planning to raise about Rs600 crore through a qualified institutional placement (QIP) or private equity.

Era has five more road projects, none of which is operational yet.

The first two projects, in Madhya Pradesh and Andhra Pradesh and worth Rs675 crore, will be commissioned in March and the third one in Haryana, valued at Rs650 crore, in May.

Era recently tied up debt for its two roads in Uttarakhand and Uttar Pradesh. The have a project cost of `652 crore and `1,007 crore, respectively.

Out of Era’s order backlog of around Rs10,600 crore, nearly `4,500 crore is from its own BOT projects.

For the quarter ended September 30, Era’s topline showed a year-on-year increase of 16% excluding the trading income of Rs136 crore in the second quarter of 2009-10. Net profit rose 5% to Rs61.8 crore.