KUALA LUMPUR: IJM Corp Bhd is disposing of its entire 100% stake in India’s Swarna Tollway Private Ltd (STPL) to MAIF Investments India 3 Pte Ltd (MAIF), through two subsidiaries, for 10.03 billion rupees (RM596.78 million).

In a filing with Bursa Malaysia yesterday, IJM Corp said IJMII (Mauritius) Ltd (IJMIIM), a wholly-owned subsidiary via IJM Investments (M) Ltd, on July 20, 2015 signed a conditional share purchase agreement (SPA) with MAIF and STPL to dispose of 175 million shares of 10 rupees each and 14 million cumulative compulsorily convertible preference shares of 10 rupees each to MAIF, according to a filing with Bursa Malaysia on Monday.

The bulk of shares represent 70% of the issued share capital of STPL. IJMIIM will part it for 6.85 billion rupees.

The expected gain from the disposal is RM92.62 million.

Meanwhile, IJM Corp’s 95%-owned unit CIDB Inventures Sdn Bhd (CIDBI) will dispose of  the remaining 30% stake in STPL — or 75 million shares of 10 rupees each and six million cumulative compulsorily convertible preference shares of 10 rupees each — to MAIF for 3.18 billion rupees.

The disposal of CIDBI’s stake in STPL is subject to obtaining the necessary approvals from the authorities and within 42 months from the completion of the disposal of the 70% equity interest.

STPL is the concessionaire for the improvement and upgrading of existing two-lane highways from km 52.8 to km 163.6 of  the Tada-Nellore section and km 217 to km 252 of the Nandigama-Ibrahimpatnam section of the National Highways No 5 and No 9 respectively, in Andhra Pradesh, India, on a build-operate-transfer basis.

“The total consideration of the disposal was arrived at on a willing-buyer, willing seller basis, after taking into consideration the discounted future cash flows of the [concession] project,” IJM Corp said.

IJM Corp (fundamental: 1.1; valuation:0.8) shares closed up 0.71% at RM7.05 yesterday, with  a market capitalisation of RM12.61 billion.

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This article first appeared in The Edge Financial Daily, on July 22, 2015.