SP Group to sell its holdings in AFCONS Infrastructure Ltd

Press meeting held with Maldivian journalists by Afcons | Photo: ToA

India – Shapoorji Pallonji Group, controlled by billionaire Shapoor Mistry, is working with an adviser to seek buyer for its holdings in Afcons Infrastructure Ltd., a Mumbai-based infrastructure construction company.

Indian medias have reported that Shapoorji Pallonji (SP) Group is looking to raise about $2.5 billion by selling some of its infrastructure and real estate assets to pare debts including its stake in AFCONS.

AFCONS is the contractor for the construction of the Thilamalé connecting bridge and the roads in Addu City. AFCONS has projects worth about MVR 10 billion in Maldives. The Addu City road project will cost MVR 1.1 billion while the Thilamalé bridge will cost MVR 8.2 billion.

India’s AFCONS Infrastructure Limited has also come under public criticism over the low quality of their works in the Addu road development project. Parliamentarian for Addu City Feydhoo constituency, Mohamed Nihad had previously raised concerns over the quality of Addu City’s road development project.

The project was officially in March, 2022 during a special ceremony, where President Solih was accompanied by Foreign Minister of Maldives Abdullah Shahid and Minister of External Affairs of India Dr. S. Jaishankar.

By the end of the MVR 1.2 billion project contracted to India’s Afcons Infrastructure Limited, a total of 107 kilometres of road is expected to be developed to modern standards, including the installation of a 103 kilometer stormwater drainage system to solve the flooding issues currently prevalent in the city during rainy monsoons.

In addition to this, the slow pace and higher cost of the Malé-Thilafushi bridge, which has also been dubbed ThilaMalé Bridge will connect Malé, Villingili, Gulheefalhu and Thilafushi compared with the Sinamalé Bridge built by the Chinese during the previous government has also been pointed out by opposition.

The 6.7 kilometer bridge includes three bridges with two roads and interchange points as well as parking areas. AFCONS stated that the Malé-Villimalé section of the bridge will be completed by mid 2023, while the Gulhifalhu and Thilafushi sections will conclude towards the end of 2023.

Afcons specializes in engineering and construction including marine infrastructure, tunnels, bridges and roads, according to its website. It has projects in more than 25 countries in Asia, Africa and the Middle East.

SP Group is also looking to sell some ports, according to Indian media reports. Gopalpur Port on the east coast of India could be among assets that SP Group is looking to sell.

The group has been seeking ways to free up cash as rising interest rates rattle the SP Group. Last year, SP Group sold water purifier equipment maker Eureka Forbes Ltd. to Advent International in a 44 billion rupees ($536 million) deal and it also divested Sterling and Wilson Renewable Energy Ltd. to Reliance Industries Ltd.

Following the sales, the company repaid $1.5 billion to lenders and exited a debt recast program. SP Group is in talks to raise $1.75 billion by pledging the remaining half of its stake in Tata Sons, Economic Times reported last week, citing unidentified people with knowledge of the matter. The company is looking to use the funds to repay obligations and infuse cash into operating companies, the report said.