GMR seeks to restructure portion of its Rs 4,000-crore debt liability

GMR seeks to restructure portion of its Rs 4,000-crore debt liability

NEW DELHI | MUMBAI: The GMR Group’s promoter holding company is seeking to restructure a portion of its Rs 4,000-crore debt liability as the Bengaluru-based infrastructure firm seeks flexibility in balance sheet to meet future capital requirements of its businesses.

More than a dozen lenders — including US private equity giant KKR’s NBFC arm, Yes Bank, Srei Infrastructure, HDFC, L&T and Piramal Group — have either given loan or subscribed to non-convertible debentures (NCD) of the parent. Lenders hold GMR Infra shares as collateral in some cases. “The intention is to cut down overall debt at the holding company level.

In addition, most of these debt facilities are maturing next year. So there could be an extension of some facilities, while closing down others. The group has already started talks with independent lenders,” said a source close to capital restructuring plans. Replying to ET’s queries, a GMR spokesperson said, “GEPL is not in any kind of discussions with lenders for restructuring of debt.”

The move comes at a time when the promoters are engaged in an international arbitration against investors in its airport holding entity, GMR Airports. The IPO of the airports arm may get delayed for a second time due to the ongoing dispute with a group of private equity investors led by Macquarie Group. These investors had put in about Rs 1,500 crore in the company’s airports arm in 2011 by subscribing to convertible securities.

Promoter holding company GMR Enterprises owns 47% in listed GMR infrastructure, which in turn holds the group’s airports, power generation and roads and highways business. About 90% of GMR Enterprises shareholding in listed GMR Infra was pledged to lenders, according to details obtained in a stock exchange disclosure made by the company on Thursday. Principal repayments for some of the NCDs begin early next year.

by the company to Russian lender VTB Capital were rated BBB- by ratings agency Brickworks. The rating ranks lowest on the scale of investment grade ratings. The rating is constrained by "high debt (significantly against pledge of GMR Infra shares), and hence interest burden and continued losses, limited revenue sources in the form of dividend/investment income as GEPL is a holding company of the group", Brickworks said in a note accompanying its rating.

The company will look to extend maturity of instruments or seek relief on interest repayment obligations for its term loans. GMR has planned a Rs 5,000-crore IPO of its airports division. Citigroup, Bank of America Merrill Lynch and Kotak Mahindra Capital have been appointed as lead managers for the proposed IPO. The list of advisors could expand.

GMR had exercised a ‘call option’ to buy back convertible securities issued to the group of investors led by Macquarie three years ago but didn’t follow through with its commitments to repay investors. Investors have filed arbitration proceedings in a Singapore court to recover their claim and a verdict is expected in June.

GMR Enterprises, was loss-making in FY 16. Its primary income is dividends from its investments in GMR Infra. The promoter group had merged two other companies, GMR Holdings and GMR Projects , into GMR Enterprises in 2016. Shares in GMR gained 1.52% to Rs 20 against a 0.28% rise in the benchmark Sensex.