Temasek, IDFC pick up CCPS in GMR Energy

Conversion to happen after 18 months

Global and Indian private equity majors, Temasek and IDFC Alternatives have agreed to restructure their existing investment in GMR Energy Limited (GEL).

The investors had invested Rs 1,395 crore in Compulsorily Convertible Preference Shares (“CCPS”) in GEL in 2010. GMR Group and the investors have now agreed to restructure the terms taking into account the interest of both the parties.

Subject to satisfaction of conditions precedent, GMR Infrastructure Limited (“GIL”), the parent of GEL, will issue CCPS worth Rs 788.8 crore to Temasek and Rs 347.8 crore to the IDFC consortium through a preferential allotment.

GMR Infrastructure added that the conversion of CCPS at GMR Infrastructure will not happen now at the current price of Rs 21. The actual conversion will take place 18 months from now at the then prevailing price, as per the Sebi guidelines.   

The residual investment of the investors in GEL will continue.

GMR Group Chairman, G M Rao has said, “We are extremely happy to have Temasek and the IDFC consortium as shareholders of GIL. This is the culmination of the long term partnership with the investors and demonstrates their confidence in the Group. We are confident that together with the support from the investors, we will build a strong Energy portfolio. This will also pave way for value creation at GMR Energy and GIL as the power portfolio has almost reached the peak of its capex cycle and is getting into the operational phase”.

Satish Mandhana, Managing Partner & Chief Investment Officer at IDFC Alternatives commented, “GMR Energy has been our 4th investment with the GMR group in the past 10 years. This step is a clear demonstration of how the Investors and GMR worked together to forge a win-win solution by being considerate of partnership obligations, in a very difficult and challenging external environment for the power sector. We look forward to a successful IPO of GEL in near future.”