GMR Infrastructure (GIL) has taken an impairment of Rs 2,212 crore on its balance sheet for its Rajahmundry and Chhattisgarh power plants, resulting in a loss of Rs 2,353 crore for the quarter ended March 31, and of Rs 3,466 crore for financial year 2018-19.
All three business segments of the company have, however, reported a profit. The airport business showed one of Rs 1,375 crore for FY19.
On Wednesday, it closed the issuance of $350 million bonds of a 10-year tenure for Delhi Airport at 6.45 per cent, for funding an expansion from 66 million to 100 million passengers a year. “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, for the GMR group, told Business Standard.
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 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 GIL and eventually help in demerger of the airport business.
GMR Rajahmundry Energy has implemented a debt resolution plan, after approval from all its lenders. GMR Chhattisgarh Energy’s resolution, for change of management, is at an advanced stage and is expected to be completed shortly. Chawla said the Chhattisgarh resolution would depend on clarity from the Reserve Bank of India after its February 2019 circular on the insolvency process was quashed by the Supreme Court.
At Hyderabad airport, the company has achieved financial closure for money to expand annual capacity from 12 to 34 million passengers, raising five-year bonds of $300 million at 5.375 per cent.
Chawla said the group had been focusing on de-stressing the balance sheet, resolving legacy issues. “Corporate debt stood at Rs 10,000 crore and has been reduced by 46 per cent through part-monetisation of the airport business.” The group would now look at capital raising for its airport business; addressing of stress-related issues in its energy business was almost complete.
“The strategy would now be to improve operating efficiency of our power plants. The worst is behind us,” he said.
The group's Kamalanga power plant (Odisha's Dhenkanal district) had improved its plant load factor (PLF) to 73 per cent in FY19, from 61 per cent in FY18. The one at Warora (Chandrapur, Maharashtra) clocked a PLF of 74.1 per cent, from 71.3 per cent in FY18.
On its roads business, Chawla said the group expected traffic to go up. In both the energy and road verticals, the infrastructure major sees operational and regulatory challenges. “There are cases with NHAI (National Highways Authority of India) 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 group’s airport portfolio has annual capapcity of 160 million passengers in operation and under development. Comprising India's busiest one, the Indira Gandhi International Airport in Delhi; Hyderabad’s Rajiv Gandhi International Airport; and the Mactan Cebu International Airport, in partnership with Megawide, in Philippines. New projects under development are an airport at Mopa in Goa and at Heraklion, Crete (Greece), in partnership with GEK Terna. The GMR-Megawide consortium has also won the Clark International Airport’s EPC (engineering procurement and construction) project, in the Philippines. GMR also recently emerged as the highest bidder for privatisation of the Nagpur airport.
The energy business has a diversified portfolio of 6,800 Mw, of which 4,500 Mw of coal, gas and renewable power plants are operational and 2,330 Mw of projects are in various stages of construction and development. The group also has coal mines in Indonesia, where it has partnered with a local company.
The group's transportation and urban infrastructure division has six operating highways projects, spanning a little over 2,000 lane km. The group has a EPC order book of railway track construction, including the Dedicated Freight Corridor project. It is also developing a multi-product Special Investment Region across 2,100 acres at Krishnagiri in Tamil Nadu and on 10,400 acres at Kakinada in Andhra.