Gammon India to Divest Its Real Estate Assets

The existing financial crises lead Gammon India, the developer of landmark ‘The Gateway of India’ to monetize its real estate assets. Severe financial loss in the 3rd quarter of the current year compels Gammon India to monetize its real estate assets. The company was severely affected by the increased financing costs and lowered sales.

The company’s debt is supposed to cross Rs.3200-Crore mark. Gammon India’s 9.84% share is owned by ChrysCapital. Another 3.01% share is owned by JP Morgan. These two are the two prominent shareholders of Gammon India.

Gammon India is probably one of the oldest and largest civil engineering companies in India which has a proud history to boast of. The company’s experience extends over to more than 100 years. Gammon India constructed ‘The Gateway of India’ in 1919.

Real estate, energy production and infrastructure development are the main three prominent fields of the company. The group has a predominant place in all – hydro, nuclear and thermal- power segments. Designing and construction of modern bridges and overpasses is also undertaken by Gammon India. On contract basis the company engages in the development of metro rail as well.

The ISKCON project at Sri Mayapur in West Bengal is the latest project of Gammon India. This project includes one temple complex as well as a modern cultural center. By bringing a partner for its Italian business, Gammon India expects to cut short its higher borrowing burden. The company is partnered with Franco Tosi Meccanica, Sofinter group, SAE Power lines, etc.

The fall of real estate sales has resulted troubles to the real estate builders. Reduced bank lending is said to be one of the most important reason for this situation. The firms like Lanco Infratech, Indiabulls Real Estate, DLF, etc. have fallen into financial crises. These firms are also said to be divesting their real estate assets. DLF’s selling of its prime plot in Mumbai is an instance. The DLF plot was bought by Lodha Developers.

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