GMR Rajahmundry Energy executes resolution plan, pares debt

GMR Infrastructure Ltd (GIL) has executed a bilateral resolution plan between its associate company, GMR Rajahmundry Energy Ltd (GREL) and the GREL lenders.

Through the resolution approved by all the lenders, the existing debt of Rs 2353 crore has been brought down to a sustainable debt of Rs 1412 crore. And against the sustainable debt of Rs 1412 core, the GMR Group has already infused Rs 395 crore towards meeting 20% of principal towards repayment of the sustainable debt and the interest servicing obligations of GREL for the first year. This leaves balance outstanding sustainable debt of Rs 1130 crore carrying a floating rate of 9 % per annum repayable over 20 years.

The balance debt of Rs 941 crore has been converted into Long Dated Cumulative Redeemable Preference Shares (CRPS) carrying 0.1% which is repayable from 17th to the 20th year

Grandhi Kiran Kumar, Managing Director & CEO, GIL said, “The first of its kind Resolution Plan offers a mutually beneficial resolution for both lenders and the company through a long-term solution for the existing debt and related obligations of the Group.” “It has reduced the debt for GMR Group and we believe this will de-risk the Group substantially. This also offers quality assets built on the ground an opportunity to perform to its potential, ” he said.

GMR remains confident of availability of gas in years to come ensuring good performance of its Rajahmundry plant and thereby meeting obligation towards both its sustainable as well as long dated preference shares.

The company believes that gas based power plants will provide peaking power support to the country’s growing non-conventional energy of wind and solar power, and the resolution plan shall be mutually rewarding to GMR Group and lenders as they continue to own 45% and 55% of share holding respectively.

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