GMR's two power projects delay repayments

ICRA downgrades loan ratings to default grade

Rating agency ICRA has downgraded ratings for long-term loans over Rs 11, 000 crore to the GMR Group’s two thermal power projects to default grade ‘D’, for delay in debt repayments.

Earlier, the loans carried a ‘BB’ rating. The two projects in question are the 1,370 Mw one at Raipur, Chhattisgarh, and a 1,050 Mw project at Kamalanga in Odisha.

The project in Chhattisgarh involves rated loans amounting to Rs 7,717 crore. The rating revision primarily takes into account the delay in debt servicing, especially during construction. The Commercial Operations Date (COD) has been extended from March 1, 2014 to March 31, 2015, ICRA said.

The cost of the other project had increased from the initially estimated  Rs 8,290 crore to Rs 11,016 crore, due to delays in project execution and depreciation of the rupee. The company had not paid the Kamalanga project instalments due this month, said ICRA, pending  ongoing refinancing and due to stretched liquidity. It has also delayed on interest servicing in recent months. The Kamalanga project achieved COD in March 2014, after much delay. It also saw cost overrun of Rs 1,979 crore from the initially budgeted cost of Rs 4,540 crore, ICRA added.