GMR Infrastructure takes Rs 2212 crore impairment on two power plants

Infrastructure has taken an impairment of Rs 2,212 crore for its Rajahmundry and Chhattisgarh power plants resulting in the company posting a loss of Rs 2,353 crore for the quarter ending March 31, 2019, and Rs 3,466 crore for the full 2018-19.

All three business segments of the company have, however, reported profit with its airport business showing a cash profit of around Rs 1,375 crore in FY19. The company yesterday closed the issuance of $350 million bonds of 10-year tenure for Delhi Airport at 6.45 per cent for funding of expansion plan from 66 million to 100 million passengers. "We got offers of $2.5 billion for the issue which shows the confidence investors have in our strategic investor and the quality of our offering," Saurab Chawla, executive director, finance, group told Business Standard.

Infrastructure Ltd (GIL) had earlier signed a binding term sheet for long-term strategic and financial investment by the Tata group, GIC Singapore and SSG Capital Management for an investment of Rs 8,000 crore in its airport business. The transaction valued GMR Airport Ltd at Rs 22,500 crore including value from earn-outs amounting to Rs 4,500 crore. The group would use this transaction to significantly deleverage Ltd and eventually help in demerger of airport business

has implemented a resolution plan after obtaining approval from all lenders, while for resolution for change of management is at an advanced stage and is expected to be completed shortly. Chawla said Chhattisgarh resolution would depend on clarity from the Reserve Bank of India on future course after the Supreme Court quashed RBI’s February 2018 circular.

At Hyderabad airport, the company has achieved financial closure for the expansion of capacity from 12 to 34 million passengers and raised five-year bonds of $300 million at 5.375 per cent.

Chawla said the group had been focussing on de-stressing the balance sheet and resolving legacy issues. “The corporate debt stood at Rs 10,000 crore which has been reduced substantially by 46 per cent through part monetisation of airport business.”

The group would now look at raising capital for its airport business while stress related issues in its energy business are more or less resolved. “The strategy would now be to improve operating efficiency of our power plants. The worst is behind us,” he said.

The Kamalganga power plant of the group improved its plant load factor (PLF) to 73 per cent in FY19 as against 61 per cent in FY18, while Warora clocked PLF of 74.11 per cent in FY19 as against 71.29 per cent in FY18.

For the roads business, Chawla said the group expected traffic to go up. In both the energy and road verticals, the infrastructure major, that has been on an asset light model for some time, the company is seeing operational and regulatory challenges. Besides, the de-allocation of the coal block had created fuel supply constraints for their power plants. “There are cases with NHAI which are pending in arbitration that need to be resolved. We have about Rs 2,300 crore stuck in claims for highways,” he said.

The GMR group’s airport portfolio has around 160 million passenger capacity in operation and under development, comprising India's busiest Indira Gandhi International Airport in New Delhi, Hyderabad’s Rajiv Gandhi International Airport and the Mactan Cebu International Airport in partnership with Megawide in the Philippines. While greenfield projects under development include the airport at Mopa in Goa and the airport at Heraklion, Crete, Greece in partnership with GEK Terna. The GMR-Megawide consortium has won the Clark International Airport’s EPC project, the second project in the Philippines. GMR recently emerged as the highest bidder for the privatisation of the Nagpur Airport.

The group’s energy business has a diversified portfolio of around 6,800 MW, of which 4,500 MW of coal, gas and renewable power plants are operational and around 2,330 MW of power projects are under various stages of construction and development. The group also has coal mines in Indonesia, where it has partnered with a local player.

Transportation and urban infrastructure division of the group has six operating highways spanning over 2,000 lane kms. The group has an EPC order book of railway track construction, including the Dedicated Freight Corridor project. It is also developing multi-product Special Investment Regions spread across 2100 acres at Krishnagiri in Tamil Nadu and 10,400 acres at Kakinada in Andhra Pradesh.

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