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Having divested interest in eight infrastructure assets, including one airport and three roadways, GMR Infrastructure Ltd has shifted its focus from asset growth to cash assets.
Making a strategic shift in its business approach as well, the company proposes to grow the airports vertical, consolidate its energy business and divest its highways projects.
The focus is likely to be on consolidation and strengthening of balancesheet through de-leveraging, continuous reduction of corporate debt, divestment of non-operational energy projects and monetisation of land in Kakinada and Krishnagiri, the company outlined in its investor presentation after second quarter numbers.
The company plans to refinance project debt through the capital market (bonds) and banks.
Asset divestmentThe diversified infrastructure player, in order to consolidate its balancesheet, had divested eight infrastructure assets and raised ₹117 billion. These include Sabiha Gocken International Airport, Turkey; Island Power Project, Singapore; Eloff & Kendall Mines (Homeland Energy Group) a coal mine in South Africa; three road projects — Jadcherla Expressway, Ulunderpet Expressway and Hungund Hospet Expresswa; and two transmission assets — Maru and Aravali.
The company has also raised ₹70 billion through equity and equity-linked instruments and ₹48.8 billion through capital markets to implement new projects.
Tenaga Nasional Berhad of Malaysia has picked up a 30 per cent stake in GMR Energy Ltd for $300 million, said the investor presentation.
GMR issued bonds for Delhi airport, marking the first infrastructure project to be entirely funded by US dollar bonds. This includes $289 million at 6.125 per cent for seven years in January 2015, and $523 million at 6.125 per cent for 10 years in October 2016.
In October 2017, the company issued bonds for Hyderabad airport to raise $ 350 million at 4.25 per cent for 10 years. This was the lowest US dollar 10-year bond coupon by a Corporate High Yield Issuer from Asia, said the company.
Land disposalIn yet another important development, the company achieved tariff increase in multiple power purchase agreements (PPAs) for both Warora and Kamalanga due to ‘change in law’ and ‘coal cost pass-through.’
Further, it inked an MoU to monetise 2,700 acres in Kakinada. The bagging of an EPC project on Eastern Dedicated Freight Corridor (DFCC) worth ₹51 billion has been significant, the company said.
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