GMR pins hope on special package for gas loans

Company also trying to get direct intervention from its lenders

With 1,100 Mw of generation capacity stuck for want of gas, Bangalore-based GMR has been trying to secure the direct intervention of its lenders, much like its peer GVK. To restructure its loans, the company has sought a special package from the government.

“For these types of assets, we have represented to the government for a special package on interest servicing,” GMR said in response to a questionnaire.

Starved of fuel for these projects through the last two years, GMR has been struggling to service interest on loans for 1,100 Mw of capacity. Apart from a government bailout, the company is also in talks with its lenders.

Hyderabad-based GVK, 228-Mw capacity of which is languishing due to shortage of gas, has secured a two-year interest holiday from its bankers.

GMR believes clarity on gas availability will emerge only by 2015-16. A city-based infrastructure analyst, however, is skeptical of the timeline given by the company. “It depends entirely on the government. What I expect is some kind of restructuring, refinancing or rescheduling and the burden will be on anyone. After these plants start operating, costs will be passed on to consumers,” he said.

For the quarter ended December, GMR’s energy segment posted a Rs 333-crore loss, primarily due to its idle gas-based capacity and the fact that its coal-based Kamalanga and Emco plants were in the initial stages of generation. “We have been servicing the interest according to the terms of the loan agreement in a timely manner, and have never delayed any payment. For the period beyond March 2014, we are discussing with the lenders on various alternatives,” GMR said.

While GVK had put aside plans to expand gas capacity by 1,600 Mw, GMR’s Rajahmundry power plant of 768 Mw was already commissioned, forcing the company to start paying interest on the loans. The project hasn’t even received gas to test its facilities.

Many power companies, including Lanco, Sravanthi, CLP India and Konaseema, had set up gas-based power plans, hoping to source gas from the Reliance Industries-run gas block in the Krishna-Godavari basin.