PNCL has announced that the company along with other partners has reached an agreement with Cube Highways (unlisted) to divest the GAEPL (Ghaziabad Aligarh Expressway Pvt Ltd, unlisted) asset for an enterprise value of up to Rs 16 bn. We note that a deal was reached with Cube Highways earlier (in May 2019) for an EV of up to Rs 18.3 bn which was subsequently called off around May 2020 after the COVID-19 outbreak. We believe the re-opening of the economy and subsequent improvement in toll collections have revived the interest in the deal from Cube Highways.
Despite a lower EV valuation for the asset, we note that cash inflows for the deal at Rs 3.8 bn for PNCL is largely similar to that of the earlier deal.
