GMR Enterprises raises Rs220 crore from VTB Capital

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Mumbai: GMR Enterprises Pvt. Ltd, holding company of the infrastructure conglomerate GMR Group, has raised Rs220 crore in structured debt financing from Russian bank VTB Capital, said two people aware of the development.

The fund raising is part of GMR’s debt restructuring efforts. Mint had reported on 23 November that GMR Enterprises was in talks to raise up to Rs300 crore to refinance debt obligations.

“They (GMR) have raised another Rs220 crore from VTB Capital. The plan is to use the funds to refinance part of the existing debt obligations of the holding company as well as to refinance some debt of subsidiary companies,” said one of the two people cited above, requesting anonymity as the talks are private.

GMR Enterprises and the promoters own a 60.1% stake in the listed firm GMR Infrastructure Ltd, stock exchange data show.

The GMR Group has three airports in operation, 10 power generation plants with a gross operational capacity of about 4,600 megawatts and eight road projects covering around 600km. GMR Infrastructure is developing two special investment regions. The group also owns the Delhi Daredevils franchise of the Indian Premier League.

The debt financing was raised through debentures with a coupon rate of around 8%, having a tenure of three-and-a-half years, said the second person quoted above, also requesting anonymity.

“GMR Enterprises has long-term debt of around Rs3,100 crore, close to 10% of which is payable within the next 12 months,” he said,

Long-term debt financing providers to the company include US private equity firm KKR, Piramal Enterprises Ltd and First Gulf Bank, the company’s financial statements filed with the Registrar of Companies (RoC) show.

In 2014, the GMR Group’s holding company had raised Rs1,000 crore in structured long-term debt from KKR and other co-investors, according to the group’s website.

The latest round of fund-raising is part of an ongoing process at the group to reduce debt on its balance sheet.

In May, GMR announced that Malaysia’s largest electricity utility, Tenaga Nasional Bhd, was buying a 30% stake in a “select portfolio” of GMR Energy Ltd assets for $300 million (around Rs2,000 crore). The transaction was closed earlier this month.

The proceeds from the stake sale will be exclusively used to reduce the company’s debt.

GMR Energy’s corporate debt will be lowered by Rs2,000 crore to Rs750 crore, GMR Infrastructure’s management said in May.

The deal will help GMR save Rs200-250 crore per year in interest costs.

As of 31 March, GMR Infrastructure had total consolidated debt of Rs37,413.35 crore.

Last month, Delhi International Airport Ltd, a subsidiary of GMR Airports and GMR Infrastructure, raised $522.6 million from international investors through a bond issue. The group has also been reported to be in talks to sell a stake in Hyderabad airport.

In September, Business Standard newspaper reported that Apollo Global Management had emerged as the front runner to buy a 30% stake in GMR Hyderabad International Airport Pvt. Ltd for Rs2,000 crore.

Mint reported last month that the GMR Group had initiated discussions with SembCorp Industries Ltd of Singapore and US-based Lone Star Funds for the sale of a significant stake in GMR Chhattisgarh Energy Ltd, a wholly owned subsidiary of GMR Energy.

“During the course of normal business, the group is pursuing variety of activities including fund raising, refinancing and others. In view of such transactions, group will be engaging with many parties. We are not in a position to comment on any specific transaction,” a GMR Group spokesperson said in an email.