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A Subba Rao, Group CFO, GMR Infrastructure told Business Standard that they are targeting to raise Rs 5,000 crore through the sale of highway projects and the rest through sale of other assets, which he did not spell out. However, it is learnt that besides the highway projects, GMR may be targeting to either exit or reduce its stake in the three coal mines it has in South Africa and Indonesia besides reducing its stake in one of its power projects in Singapore.
“Times are challenging and we are progressing in the strategy of divesting some of the road projects. The National Highways Authority of India allows an operator to reduce 74% of their stake to another investor. We should be achieving finality of at least around three highway projects within the next couple of quarters,” Rao added. It is also learnt that GMR Infrastructure is also parallely looking to group the five highway projects under a Business Trust and list it on the Singapore exchange, similar to the Real Estate Investment Trust (REIT). Cumulatively, GMR has an equity exposure of close to Rs 2,000 crore towards the five highway projects which is operational.
GMR has been in the red for the most of the last fiscal and had to suffer one major setback during fag end of last year after having been forced to exit from the $500 million Male International Airport. “The arbitration over that project has started and we are working towards arriving at a sum as compensation,” he added. GMR Infrastructure had earlier stated that it will seek to claim as much as $800 million as compensation for having been forced to exit the project.
GMR, which reported doubling of its net loss to Rs 217 crore during the third quarter of Fy13, said that the airport and highways are operationally profitable, while the power segment is the one which is hurting them due to non-availability of the necessary fuel. According to GMR Group officials, the proposed expensive power supply scheme (EPSS) by the Andhra Pradesh government may help to address the issue going forward over the next two quarters. The AP Electricity Regulatory Commission recently gave the nod for EPSS, which among various other steps, it will supply power at no-loss and no-profit basis by arranging re-gasified liquefied natural gas to gas generators having idle capacity in Andhra Pradesh. It is learnt that the two projects of GMR which feed on the LNG in the East Coast has a plant load-factor of 8% and with this new arrangement it may go up to 25%, but which will still be hurting. According to another senior official of GMR, they may also explore the Business Trust listing option in a global exchange for the power vertical as well.
