Projects will go ahead even if AFCONS is sold: Gov’t

Miuvan Mohamed, Spokesperson at President's Office | Photo: President's Office

Malé, Maldives – The sale of AFCONS Infrastructure will not affect the company’s projects in Maldives, the government said today.

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 due to financial difficulties.

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.

With that, many are questioning what will happen to their projects in the country.

Replying to a question from a journalist at a news conference held at the President’s Office, Spokesperson Miuwan Mohammed told that the sale of AFCONs will not affect its ongoing development projects, adding that it is common for holding companies to sell their assets and subsidiaries.

“We also saw in the media that the parent company of AFCONS is going to sell it. However, it will not affect the ongoing projects in Maldives,” Miuvan said.

Replying to a question at a press conference today, Miuwan said the government had not been informed of the sale of AFCONS. However, following the media reports the government is now looking into the matter, he said.

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.