GMR to Monetise Assets Reduce Debts

In its bid to reduce debt, GMR Infrastructure has charted out a strategy to monetise 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. The company 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 Delhi International Airport (DIAL) and GMR Hyderabad International Airport (GHIAL). It 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 GHIAL and DIAL, refinanced bonds worth $415 million at GMR Airports, achieved financial closure of Rs 2,600 crore for a new airport at Goa and divested certain non-core assets at the Kakinada Special Investment Region (10,400 acre) with a Rs 2,700 crore deal with Aurobind Realty. 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 broadened 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 1,900 acre, 300 acre is under sale to an Indian multinational, 425 acre is in discussion for sale to a Tamil Nadu government agency and the next phase of development of 300 acre is underway under a joint venture with Tamil Nadu Industrial Development Corporation (TIDCO) to cater to electronics, automobile, logistics, engineering and aerospace sectors.