GMR Rajahmundry Energy executes resolution plan

GMR Infrastructure on Friday announced execution of a bilateral resolution plan between its associate company GMR Rajahmundry Energy Ltd (GREL) and the lenders.

"The resolution plan has been approved by 100 per cent of lenders. The existing debt of Rs 2,353 crore has been brought down to a sustainable debt of Rs 1,412 crore," GMR Infrastructure said in a statement.

Against above sustainable debt of Rs 1,412 crore, GMR Group has already infused Rs 395 crore towards meeting 20 per cent of principal towards repayment of the sustainable debt and interest servicing obligations of GREL for the first year.

This leaves balance outstanding sustainable debt of Rs 1,130 crore carrying a floating rate of 9 per cent per annum repayable over 20 years. The balance debt of Rs 941 crore has been converted into long dated cumulative redeemable preference shares carrying 0.1 per cent which is repayable from 17th to the 20th year.

"The first-of-its-kind resolution plan offers a mutually beneficial resolution for both lenders and the company through a long-term solution for the existing debt and related obligations of the group," said GMR Infrastructure's Managing Director and Chief Executive Officer Grandhi Kiran Kumar.

"It has reduced the debt for GMR Group and we believe this will de-risk the group substantially. This also offers quality assets built on the ground an opportunity to perform to its potential."

GMR said it remains confident of availability of gas in years to come ensuring good performance of its Rajahmundry plant and thereby meeting obligation towards both its sustainable as well as long dated preference shares.

"GMR believes that gas-based power plants will provide peaking power support to the country's growing non-conventional energy of wind and solar power," it said in the statement.

"The resolution plan will be mutually rewarding to GMR Group and lenders as they continue to own 45 per cent and 55 per cent of shareholding respectively."

The Rajahmundry Power Project is a 768 MW combined cycle power plant with natural gas and group's largest gas-based power plant located at a site adjacent to Vemagiri Power and close to Krishna Godavari gas basin.

The plant is equipped with an advanced gas turbine technology from GE and both units of the plant have been commissioned.

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