Lenders get majority stake in GMR's Chhattisgarh unit

Of the total debt of Rs 8,800 cr, debt to the extent of Rs 2,992 cr has been converted into equity

GMR Chhattisgarh Energy Ltd (GCEL), subsidiary of GMR Infrastructure Ltd (GIL), has announced the consortium of lenders of GCEL has adopted the Reserve Bank of India’s strategic debt restructuring (SDR) scheme to allot equity shares to all the lenders.

Under SDR, lenders get the right to convert the full or part of their loans into equity shares in a distressed company.

GCEL has debt (including accrued interest) of Rs 8,800 crore. Of this, Rs 2,992 crore has been converted into equity under the SDR plan, resulting in transfer of 52.4 per cent shareholding to the lenders. The balance 47.6 per cent will be held by GMR.

After the conversion, the balance project debt stands at Rs 5,800 crore with Rs 2,992 crore equity held by the lenders and Rs 2,721 crore equity by the GMR group. 

The lower debt levels would help improve the long-term viability of the project, the company said.

GCEL is a 1,370 Mw (2x685 Mw) coal-based plant at Tilda, in Raipur district. The project was fully commissioned in March 2016 and has long-term fuel security in the form of two captive coal blocks. The plant is currently operating under short-term power purchase agreements through exchange and bilateral routes.

The GMR group, an infrastructure conglomerate with interests in airport, energy, transportation and urban infrastructure, has 15 power generation projects, nine operating road assets and a double rail track line of eastern dedicated freight corridor under development.  

The group operates Indira Gandhi International Airport in New Delhi and greenfield Rajiv Gandhi International Airport in Hyderabad. GMR Infrastructure, in partnership with Megawide Construction Corporation, is developing Mactan Cebu International Airport in Philippines. 

It is also developing two special investment regions at Krishnagiri and Kakinada and India’s largest smart airport city near Hyderabad airport.