Hyderabad: GMR Infrastructure Ltd said that Reserve Bank of India (RBI) has declined to extend the deadline to lenders of GMR Rajahmundry Energy Ltd for the sale of their 55% stake in a gas-based power project in Andhra Pradesh.

A consortium of lenders led by IDBI Bank had put on sale 55% of their stake in GMR Rajahmundry Energy, which they acquired last year as part of conversion of debt into equity. GMRL operates a 768 MW natural gas—based power plant at Rajahmundry in the coastal region of AP.

The debt was converted into equity as part of debt restructuring. Following the conversion, lenders got 55% stake in the project while the promoters’ holding was reduced to 45%. The project still has a debt of Rs2,366 crore.

GERL has not commenced operations pending linkage of natural gas from the ministry of petroleum and natural gas till September 2015, resulting into lenders invoking strategic debt restructuring (SDR), under which the debt would be converted as equity.

“Under the SDR scheme, the banks have to find a new promoter for GERL within the period as prescribed under the scheme, which expired during the quarter ended 30 June 2017. The lenders sought the approval from the RBI for the extension of timelines for a further period of three months which has not been accepted by RBI," GMR said in regulatory filing recently.

“The lenders and management are exploring various options for revival/sale of the project," it said. Under the SDR, borrowing aggregating Rs1,308.57 crore and interest accrued Rs105.42 crore was converted into equity shares on 12 May 2017 for 55% stake in GREL. The group has given a guarantee of Rs2,738 crore for the remaining debt.

According to a pre-bid document issued by the IDBI, the project still has a debt of Rs2,366 crore. IDBI Capital invited offers in January 2017 from interested parties, who might be willing to buy 55% of the equity shares and take over the management and control of the company and the project.

The power plant project was completed in 2012, but the commissioning of the project was delayed due to unavailability of gas supply on account of unprecedented fall in gas production in KG—D6 basin, which led to cost overruns. The project was fully commissioned in October 2015. The promoter holding in GMR Rajahmundry Energy is valued at Rs1,157 crore, while bankers’ equity is valued at Rs1,414 crore post—SDR, as per the bid document.