GMR plans to raise Rs1,000 crore from KKR
The money will be used by GMR to retire existing debt and for general corporate purposes, say people close to the development
Mumbai: GMR Infrastructure Ltd is planning to raise at least ₹ 1,000 crore from private equity firm KKR and Co. through a structured financing agreement, according to two people close to the development.
The money will be used by GMR to retire existing debt and for general corporate purposes, they said.
The deal is structured in a way that the performance of GMR’s stock will affect KKR’s return on investment, one of the two people cited above said, requesting anonymity.
GMR Infrastructure has a consolidated debt of ₹ 39,187.45 crore as of 31 March.
A senior GMR Group executive, requesting anonymity, said the company is talks with a clutch of financial institutions to raise funds including structured debt and other forms of debt instruments. However, nothing has been finalized, he said.
A GMR Group spokesperson declined to comment.
KKR said the firm does not comment on speculation.
On 28 July, Mint reported that investors are starting to look at Indian assets more favourably and the debt-laden GMR Group is moving quickly to strengthen its balance sheet by selling shares in at least two group companies, even as it continues to look at selling some of its assets.
The GMR Group will sell shares for the first time to the public in units GMR Energy Ltd and GMR Airports Ltd, the group’s chief financial officer Madhu Terdal told Mint in July.
GMR Infrastructure had tested the equity market in early July by raising $350 million through a share sale to financial institutions. The group also plans to sell a partial stake in its road assets to pare debt.
Separately, GMR Infrastructure on Tuesday signed a so-called Memorandum of Understanding (MoU) with Japan Bank for International Cooperation (JBIC) for providing financial assistance to Japanese companies investing in GMR Group’s infrastructure projects
The objective of this accord is to provide low-cost, long-duration financing for infrastructure development projects that involve Japanese companies in development of industrial parks, power, energy, ports, airports, highways and railway projects, GMR said in a statement. Over the next 12 months, GMR and JBIC will work on identifying projects to attract Japanese investments.
GMR Infrastructure has interests in airports, energy, highways and urban infrastructure sectors. The company has 15 power generation assets of which eight are operational and seven are under various stages of development. In the highways sector the group is operating seven road assets across the country. In the airports sector, the company operates airports in New Delhi and Hyderabad.
The GMR Group has been recently awarded the Mactan-Cebu International Airport project in the Philippines for rehabilitation, expansion and operation with a concession period of 25 years.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!