IDBI-led lenders consortium put 55% stake in GMR Rajahmundry Energy on sale

A consortium of lenders led by IDBI Bank has put on sale 55 per cent stake in a GMR-built gas based power project in Andhra Pradesh which they had acquired last year following debt restructuring.

Lenders had last year converted a part of their debt into equity in GMR Rajahmundry Energy, that operates a 768 MW natural gas-based power plant at Rajahmundry in Andhra Pradesh.

GMR Rajahmundry Energy is a unit of GMR Infrastructure.

Following the conversion, lenders got 55 per cent stake in the project while the promoters holding was reduced to 45 per cent. The project still has a debt of Rs 2,366 crore.

In a pre-bid document, IDBI Capital said a consortium of lenders, led by IDBI Bank, plans to sell 55 per cent of the equity stake of the company issued pursuant to the strategic debt restructuring guidelines.

"IDBI Capital invites offers from interested parties who may be willing to buy 55 per cent of the equity shares and take over the management and control of the company and the project," the pre-bid document said, as it asked potential bidders to submit their expression of interest.

The bidders who would be eligible for bidding for the project should have a consolidated net worth as a Group company as on March 31, 2016 or December 31, 2016, at least Rs 500 crore and debt to equity ratio should not be greater than 3:1.

If the bidder is a fund house, then its asset under management or committed capital as on March 31, 2016 or December 31, 2016 should be at least Rs 1,000 crore.

The power plant project was completed in 2012, but the commissioning of the project was delayed due to unavailability of gas supply on account of unprecedented fall in gas production in KG-D6 basin which led to cost over-runs. The project was fully commissioned in October 22, 2015.

The lenders to the GMR Rajahmundry Energy, which is saddled with Rs 2,366 crore debt in May, 2016 exercised the Strategic debt restructuring (SDR) as per RBI guidelines.

Under the SDR mechanism, banks can take over distressed companies to whom it had lent by converting full or part of their loans into equity shares.

The promoter holding in GMR Rajahmundry Energy is valued at Rs 1,157, while bankers' equity is valued at Rs 1,414 crore post-SDR.

Pursuant to the invocation of the SDR Scheme, the lenders of the company converted part of the debt outstanding into equity. They now want to sell the 55 per cent it had acquired in GMR Rajahmundry Energy, which is a 768 MW (2x384 MW) natural gas-based power plant in district Rajahmundry, Andhra Pradesh.