GMR gets lenders' approval for power project's debt-resolution plan

GMR Infrastructure on Friday said all lenders, led by IDBI Bank, have accepted the debt resolution plan of its associate firm GMR Rajahmundry Energy Ltd.

The plan has brought down the existing debt of Rs 2,353 crore to a sustainable debt of Rs 1,412 crore, GMR Infra said in a filing to stock exchanges. In sustainable debt, there is a possibility of repayment from future cash flows.

Against the sustainable debt of Rs 1,412 crore debt, GMR Group has already infused Rs 395 crore towards repayment, GMR Infra said. “The balance debt of Rs 941 crore has been converted into long-dated cumulative redeemable preference shares carrying 0.1%, which is repayable from the 17th to the 20th year,” GMR Infra added.

GMR Group and lenders continue to own 45% and 55% shareholding, respectively, in GMR Rajahmundry Energy.

With the acceptance of the debt resolution plan, GMR Rajahmundry Energy, which owns a 768-megawatt gas-based power plant in Rajahmundry in Andhra Pradesh, has become one of the first distressed assets to have been resolved after the Supreme Court on 2 April struck down the Reserve Bank of India’s (RBI’s) 12 February 2018 circular on bad loans.

GMR Rajahmundry Energy was referred by IDBI Bank to the insolvency tribunal before the apex court’s order and was yet to be admitted by the National Company Law Tribunal.

Completed in 2012, the power plant’s commissioning was delayed until October 2015 due to unavailability of gas supply on account of unprecedented fall in gas production in the KG-D6 (Krishna-Godavari) basin, which led to cost overruns.

In May 2016, GMR Rajahmundry Energy had exercised the strategic debt restructuring (SDR), in line with a central bank framework, which failed to see any conclusion.

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