Local sources recently reported that Indian infrastructure developer IVRCL has announced plans to sell Rs40 billion (US$646.6 million) worth of assets to reduce its debt in two years. The assets on sale are the Chennai desalination plant and several road projects around the country.

According to sources, the divestment of a stake in the Chennai de-salination plant is at an advanced stage. The firm holds a 75% stake in the project while Spanish Befesa Agua holds the remaining 25%. The project has been developed on a build, own, operate and transfer (BOOT) basis. The contract period in 25 years.

E Sudhir Reddy IVRCL's Chairman and Managing Director commented:

We will be selling the BOT projects and come out of debt in two years. The debt component on the main company is not much. On the EBITDA side there is profit in the company. We are servicing more of interest component (on the loans).

Mr. Reddy commented that IVRCL is currently engaged in discussion with Tata Group firm TRIL Roads Pvt Ltd to offload three road projects but no binding term sheets have been signed by the parties.

IVRCL owns seven road projects, including three operational projects.

The company needs to sell assets due to the fact that it is facing liquidity problems due to the economic slowdown, higher interest charges, and slower pace of execution of projects.