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BF Utilities, a group company of Pune-based Kalyani Group, has said it will consider various options to enhance shareholder value by restructuring its flagship project Nandi Infrastructure Corridor Enterprise (NICE), which has been implementing the Bangalore - Mysore expressway for the past nearly two decades.
The management of publicly-held BF Utilities during its AGM on Monday took into view the suggestions of its shareholders and said that it will appoint merchant bankers and consultants to look into the various options to restructure a subsidiary - Nandi Economic Corridor Enterprise (NECE).
Industry watchers indicate that this subsidiary is likely to be merged into NICE as part of the restructuring. The management however said they will not comment on the outcome of the move as they have just kickstarted the process.
NECE was floated as an SPV in 1999 to develop close to 6,100 acres for the various aspects of the expressway, including the peripheral ring road, link road, 12 kms of expressway, one township and one interchange.
As part of the initiative, the NECE has managed to complete 41 kms of peripheral ring road, nine kms of link road, six kms of the expressway and eight interchanges. The rest of the expressway project has been held up for want of various approvals for acquiring land as well as for the township.
The expressway which is prone of legal wranglings, has been the centre of protracted negotiations between the management and Deve Gowda, the erstwhile chief minister of Karnataka, who has been opposing the project in its totality over allegations of land grab.
The NECE project has so far seen investments of close to Rs 3,600 crore with a debt component of around Rs 1,600 crore, while there has been private equity infusion from JP Morgan and 3i Capital. BF Utilities own 74 per cent in NICE, and in turn NICE owns 68 per cent in NECE.
BF Utilities has floated the NICE project with an aim to develop 20,193 acres over a period of time to develop a total of 111 km of expressway connecting Bangalore to Mysore, 41 kms of peripheral ring road, 9 link road, five townships besides 16 interchanges.
The project which has been at the centre of much debate in Karnataka, has so far managed to be a good option for heavy trucks to move away from the city and it is understood that it is generating revenues of around Rs 14 crore per month.
NICE ROAD
* BF Utilities is a group company of Kalyani Group and it owns 74% of Nandi Infrastructure Corridor Enterprise (NICE) to develop 20,193 acres of land
* NICE floated a SPV Nandi Economic Corridor Enterprise (NECE) in 1999 to develop 6,100 acres
* NECE has raised private equity from JP Morgan and 3i Capital and NICE owns 68% in NECE
* NECE has executed 41 kms of peripheral ring road, 9 kms of link road, 6 kms of expressway and 8 interchanges
