Companies

GMR to re-energise gas fired plants, monetise land at Krishnagiri, Kakinada

V Rishi Kumar Hyderabad | Updated on June 21, 2021

The company posted a loss of ₹3,428 crore and logged total revenue of ₹6,229 crore during FY21

Plans multi-pronged strategy to pare debt

GMR Infrastructure Ltd has charted out a multi-pronged strategy to pare debt by monetisation of land assets in Kakinada in Andhra Pradesh and Krishnagiri in Tamil Nadu, and other locations, while reviving stranded gas fired power projects and exploring foray into new energy segment.

In a detailed strategic plan outlined after the recent board meeting to announce Q4 and FY21 results, the debt-laden infrastructure company outlined how it is looking at bringing down debt by divesting assets and raising funds through bonds.

It plans to complete the demerger process by creating two listed pure-plays. It also plans to refinance its remaining debt through dollar bonds at GMR Infrastructure like it had managed in its airports —DIAL & GHIAL.

The company also plans to bid for new airports within India and in South East Asia, look at development of adjunct airport services businesses and foray into new businesses in the space of energy once the business is demerged into another listed entity.

Among other key strategic initiatives are plans to re-energise the gas plants with new availability of gas, create cash flows, work with renewable energy companies for a tie-up under new tariff policy and complete the last leg of sale of Kakinada SIR and accelerate sale of land parcels in the Krishnagiri SEZ.

During the Covid disruption, the company focussed on liquidity by raising bonds worth $750 million in Hyderabad (GHIAL) and Delhi Airports (DIAL), refinanced bonds worth $415 million at GMR Airports Ltd, achieved financial closure of ₹2,600 crore for a new airport at Goa and divested certain non-core assets at the Kakinada Special Investment Region (10,400 acres) with a ₹2,700-crore deal with Aurobind Realty.

Airport expansion

Apart from cost savings by shutting down certain terminals due to low traffic, it has postponed operational capex and has rephased the ongoing expansion projects at DIAL and GHIAL.

The availability of gas from the Krishna Godavari basin has rekindled the company’s hopes of recharging the stranded gas fired power projects along the Andhra Pradesh coast. If it manages fuel allocation and revives these plants, the company will be able to see fresh cash flows and liquidity.

On land parcels for sale, of the 1900 acres, 300 acres is under sale to an Indian multinational, 425 acres is in discussion for sale to a TN Government agency and the next phase of development of 300 acres is underway under a joint venture with TIDCO to cater to electronics, automobile, logistics, engineering and aerospace sectors.

The company posted a loss of ₹3,428 crore and logged total revenue of ₹6,229 crore during FY21, against a loss of ₹2,198 crore and revenue of ₹8,556 crore in FY20.

Published on June 21, 2021

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