GMR Infra announces SDR

GMR Rajahmundry Energy (GREL), a subsidiary of GMR Infrastructure, has said that in the absence of long-term fuel supply agreements and long-term power purchase agreements, a consortium of lenders has adopted the strategic debt restructuring (SDR) scheme.

Accordingly, in a meeting held on Friday, the company issued equity shares proportionately to all the lenders.

According to the SDR scheme, of the total debt (including overdue interest) of Rs 3,780 crore, debt to the extent of Rs 1,414 crore has got converted into equity, by which the consortium lenders would have a 55 per cent shareholding, while 45 per cent would be held by GMR.

After the conversion, the balance debt of Rs 2,366 crore would be having a repayment period of 20 years with a moratorium of 21 months and interest rate of 10.75 per cent. After SDR, the total equity in the project would be Rs 2,571 crore resulting in the debt-to-equity ratio of 0.9.

The lower debt levels, coupled with reduction in interest cost, would result in improving the long-term viability of the project, the company said. The group currently has consolidated debt of Rs 6,375 crore, said G B S Raju, chairman of GMR Energy, after the announcement.

Last week, the group announced disinvestment of 30 per cent in its 10 energy assets to a Malaysian power utility for $300 million. Tenaga Nasional Berhad (Tenaga) would hold the stake in GMR Energy. The Rajahmundry project is outside the GMR Energy portfolio.

The GMR group, which has interests in airport, energy, transportation and urban infrastructure, has 15 power generation projects, nine operating road assets and a double rail track line of eastern dedicated freight corridor under development.

GREL is a 768 megawatt (Mw) (2x384 Mw) natural gas-based power plant in Rajahmundry district of Andhra Pradesh. Although the project was completed in 2012, 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 over-runs. The project was fully commissioned in October 2015.

Under the e-RLNG (regassified liquefied natural gas) bid scheme of the government for stranded gas power plants, GREL has gas supply in both phase-II and phase-III of bidding. In phase III of the scheme, the plant will receive gas from GAIL to operate up to 30 per cent plant load factor and supply the entire power produced to Andhra Pradesh discoms according to the power purchase agreements executed with them.