GMR group flies into new zone

Acquires 12-seater Falcon; launches aircraft division

Hyderabad-based GMR group has made a quiet landing in aircraft services. The company purchased Falcon, a 12-seater aircraft, at a cost of about Rs 75 crore last month.

The group is into airport construction activity apart from pursuing huge investment plans on expansion of sugar production capacities both in Andhra Pradesh and Karnataka.

Disclosing this here today, K Narayana Rao, managing director of GMR Industries Limited, said the aircraft would be used as a chartered service as well as for captive purposes. It has created an aircraft division for the purpose.

Though the company has no immediate plans to acquire more aircraft in the immediate future, Rao did not rule out the possibility of the budding aircraft division evolving into a full-fledged airline service wing.

"We will certainly think of such a possibility based on the experience gained from operating the present aircraft," Rao told mediapersons. The aircraft was flown for a few hours last month, he said.

The company had got the permission to operate the aircraft both from Bangalore and Hyderabad and would seek similar facility at Delhi and other places in coming days, Rao said.

Besides, GMR Industries is investing about Rs 40 crore in expansion of its sugar plant in Andhra Pradesh and Rs 120 crore in the Rs 263-crore greenfiled sugar plant in Karnataka this year. Of the Rs 40-crore investment, the company received Rs 14 crore as loan from the Centre's sugar development fund.

With regard to Karnataka plans, Rao said, the company had already tied up with banks for Rs 183-crore loan and another Rs 80 crore would be mobilised through internal accruals of the company. About Rs 140 crore would be invested in the Karnataka plant in the second year. Financial closure for the Karnataka plant is expected to be achieved in June 2006.

Responding to a question, Rao said the company would consider private placement of equity shares to FIIs but ruled out any further dilution of the company's equity.

With the addition of sugar production capacities as well as the stabilisation of the 40,000-litre distillery operations along with new initiatives in agri business, the company hopes to scale up both the turnover and profits during the current financial year. Rao said the company was looking at sugar exports as a more profitable proposition.