S t a k e s a l e i n J u r o n g I s l a n d p r o j e c t …
GMR Infrastructure (GMR) has agreed to sell a 30% stake in GMR Energy
(Singapore) Pte to Petronas International Corp. The deal has been done at
a 30% premium to its equity investment (S$127 million). Based on this
deal, GMR’s investment in the Jurong Island project is valued at S$165
million implying contribution of | 1.6 per share. Furthermore, GMR has
announced that it has received letter of award for six laning of the biggest
stretch (Kishangarh-Udaipur-Ahmedabad stretch) covering 555 km.
ƒ Stake sale of 30% in Jurong Island project
GMR has agreed to sell a 30% stake in GMR Energy (Singapore) Pte to
Petronas International Corp. This deal has been done at 30% premium to
its equity investment (S$127 million). This implies a deal value of ~ S$50
million for a 30% stake. The transaction also values GMR’s investment in
Jurong Island project at S$165 million (S$115 million for 70% stake value
+ S$50 million as cash) from the deal implying contribution of |1.6/share
for GMR’s investment in the Jurong Island project. The Singapore unit is
developing a gas based 800 MW power project on Jurong Island. Total
cost of the project is S$1175 million with debt of S$670 million, equity of
S$127 million and shareholders’ loan of S$378 million.
ƒ Bags first mega project from NHAI
GMR has also bagged the mega project for six laning of the KishangarhUdaipur-Ahmedabad stretch. It is the biggest road project awarded by
NHAI covering 555 km (3336 lane km). Media reports indicate that the
project cost is ~| 7200 crore and the concession period is 26 years.
GMR will pay a premium of | 636 crore p.a. with 5% hike every year.
V a l u a t i o n
At the CMP, the stock is currently trading at an attractive valuation of 1.1x
FY13 P/BV. Hence, we are upgrading it to BUY recommendation with an
SOTP price target of | 35/share. We have not incorporated the Singapore
investment and mega project in our SOTP valuation. From a stock
performance point of view, we believe the implementation of regulated
tariff for DIAL and the PPA agreement for the power project under
development would act as key catalysts
GMR Infrastructure (GMR) has agreed to sell a 30% stake in GMR Energy
(Singapore) Pte to Petronas International Corp. The deal has been done at
a 30% premium to its equity investment (S$127 million). Based on this
deal, GMR’s investment in the Jurong Island project is valued at S$165
million implying contribution of | 1.6 per share. Furthermore, GMR has
announced that it has received letter of award for six laning of the biggest
stretch (Kishangarh-Udaipur-Ahmedabad stretch) covering 555 km.
ƒ Stake sale of 30% in Jurong Island project
GMR has agreed to sell a 30% stake in GMR Energy (Singapore) Pte to
Petronas International Corp. This deal has been done at 30% premium to
its equity investment (S$127 million). This implies a deal value of ~ S$50
million for a 30% stake. The transaction also values GMR’s investment in
Jurong Island project at S$165 million (S$115 million for 70% stake value
+ S$50 million as cash) from the deal implying contribution of |1.6/share
for GMR’s investment in the Jurong Island project. The Singapore unit is
developing a gas based 800 MW power project on Jurong Island. Total
cost of the project is S$1175 million with debt of S$670 million, equity of
S$127 million and shareholders’ loan of S$378 million.
ƒ Bags first mega project from NHAI
GMR has also bagged the mega project for six laning of the KishangarhUdaipur-Ahmedabad stretch. It is the biggest road project awarded by
NHAI covering 555 km (3336 lane km). Media reports indicate that the
project cost is ~| 7200 crore and the concession period is 26 years.
GMR will pay a premium of | 636 crore p.a. with 5% hike every year.
V a l u a t i o n
At the CMP, the stock is currently trading at an attractive valuation of 1.1x
FY13 P/BV. Hence, we are upgrading it to BUY recommendation with an
SOTP price target of | 35/share. We have not incorporated the Singapore
investment and mega project in our SOTP valuation. From a stock
performance point of view, we believe the implementation of regulated
tariff for DIAL and the PPA agreement for the power project under
development would act as key catalysts
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