GMR Energy taps temasek

To raise $200 mn through structured paper.

GMR Energy Ltd (GEL), the power generation arm of GMR Infrastructure, has finalised a plan to raise $200 million from Singapore-based Temasek Holdings.

The investment would be through a structured paper, compulsorily convertible into equity, according to a GEL statement.

GEL plans to use this fund to enhance its installed power generation capacity from 808 Mw to more than 6,500 Mw over the next three-four years. According to company officials, this capacity addition would involve an investment of Rs 35,000 crore. Power generation companies usually work on a 75:25 debt equity ratio.

GEL contributed around 50 per cent to GMR Infrastructure’s revenues of Rs 3,500 crore (at the end of December quarter) and, on a profit level, contributed around 40 per cent.

GEL has a debt of close to Rs 7,000 crore, under a leverage of 1.7 times. “We may look at repaying a certain portion of debt from this infusion, if the shareholders decide to,” a senior official of GMR Energy said.

It has already achieved financial closures and fuel linkages for GMR Kamalanga (1,050 Mw) and Emco Energy (600 Mw) projects. Several other projects are also in advanced stages.

G M Rao, chairman of GMR Group, said, “We are extremely happy to have Temasek Holdings as a shareholder of GEL. Temasek is an established investor globally and one of the earliest investors in India.

We are confident that this relationship will be a mutually gratifying experience for both parties.”

Manish Kejriwal, head of Temasek Holdings India, said, “The energy sector within the infrastructure space is an attractive long-term investment area. India may have historically lagged in adding new generation capacity, we believe that enabling regulations and private sector participation will allow the sector to add substantially to India’s GDP growth rate. We are pleased to announce our partnership with the GMR Group and participate in the growth of GMR Energy.”

GMR Group is a Bangalore-headquartered global infrastructure major, with interests in airports, energy, highways and urban infrastructure. The company has 13 power projects, of which three are operational and 10 are under various stages of implementation, and nine road projects, of which six are operational and three are under development.