GMR said to be eyeing sale of two more power projects

GMR Group seems to be on a selling spree. After selling its power plant in Singapore this week, the infrastructure major might consider selling two domestic power projects.

An official said GMR was looking for offers with a suitable valuation to monetise its 1,050-Mw Kamalanga power project in Odisha and the 600-Mw project in Warora, Maharashtra, acquired from Emco. A spokesperson said no such move was in the offing, and both the plants were under construction and on schedule.

Both the projects have commissioned one unit each recently. GMR synchronised the first 300-Mw unit of its two units in the Warora project in December. The Kamalanaga project synchronised the first of its three 350-Mw units in January. The company was planning to expand the Warora plant to 1,000 Mw.

GMR is known to be in talks with investment bankers to find suitors for the two projects.

The sale of the assets might go with the company's "asset-light, asset-right" strategy. "This approach builds on our strengths as a developer and, as a result, we follow the principle of develop, build, create value, and divest. We believe this is a sustainable long-term model for Indian infrastructure developers," the company said.

Like many of its peers, GMR is burdened by debt, which could be a reason for the sale. According to a report by Prabhudas Lilladher analyst Rupa Shah, the total debt of the GMR Group is Rs 41,600 crore, four times its equity.

This week, the group sold its 70 per cent stake in GMR Energy (Singapore) to FPM Power Holdings for Singapore Rs 2,600 crore. The company had said this would give a profit of Rs 1,356 crore and free capital of Rs 1,616 crore.

The Singapore power plant in Jurong Island is commissioning an 800-Mw (gross) gas-based power plant. With 96 per cent of the construction completed, the plant is set to begin operations by 2013-end.

GMR plans to conduct regular portfolio reviews to identify assets that have created maximum value to it as a developer and are right for divestment.

"With this sale (of the Singapore power plant), GMR is swiftly translating itself into an asset-light model," the Prabhudas Liladher report said. "A combination of stake sale and an improvement in the operations of the current assets will help to de-leverage further."

GMR's peer Lanco Infratech, too, has debt of about Rs 33,833 crore and is also said to be on the lookout for buyers for its power plants.