GMR Infra: Associate reduces debt through resolution plan

GMR Infrastructure Limited made a public announcement that its associate company has successfully executed a resolution plan with the aim of debt reduction, on Friday.

GMR Infra's associate, GMR Rajamundry Energy brought down its debt to Rs. 1,412 crore from Rs. 2,353 crore. As per the resolution plan, the company will repay the principle amounting to Rs. 395 crore for the first year. On execution of these plans, the outstanding debt remains to be Rs. 1,130 crore, which has a validity of 20 years and carries a floating rate of 9 per cent. The Balance Debt of Rs. 941 crore has been converted into Long Dated Cumulative Redeemable Preference Shares (CRPS) carrying 0.1 per cent which is repayable from 17 to the 20th year.

GMR’s management has an optimistic view of its growth and financial performance. Debt reduction at the group level will de-risk the group’s sustainability. GMR remains confident of availability of gas in years to come ensuring good performance of its Rajahmundry plant and thereby meeting obligation towards both its Sustainable as well as Long dated Preference shares. The company believes that gas-based power plants will provide peaking power support to the country’s growing non-conventional energy of Wind and Solar power and the Resolution Plan shall be mutually rewarding to GMR Group and lenders as they continue to own 45 per cent and 55 per cent of shareholding, respectively.

Stock ended Friday’s trading session down by 1.20 per cent at Rs. 16.50 on BSE. The benchmark index, BSE Sensex ended trading session at marginally lower at 38963.