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Hyderabad-based energy and infrastructure company GVK Power Infrastructure Limited on Friday said it was in advanced stage of negotiations to sell one of its BOT road projects as part of its ongoing efforts to reduce the debt levels.
"We are putting all efforts to ease the debt burden of the company," said Isaac George, the group's chief financial officer, on the sidelines of the annual general meeting of the company.
He said the company was looking at selling 1-2 assets, one of which could be concluded in a few months' time.
Earlier this year, GVK had sold 33 percent stake in the profit making Bangalore International Airport Limited (BIAL), which runs the Kempe Gowda Airport in Bengaluru, to its existing partner Fairfox for Rs 2,100 crore. Together with the potential sale of the road asset, the company hopes to reduce the debt by up to Rs 2,500 crore by March, 2017, according to the company CFO.
Sources indicated that the ongoing sale negotiations were pertaining to the 332-km Deoli-Kota Expressway project in Rajasthan. Started partial operations in August 2015 this BOT project had generated Rs 28.32 crore revenues for the year ended March, 2016,.
As per the annual report, GVK group has a consolidated debt of Rs 27,432.91 crore as at the end of March, 2016. Interest costs rose 53 percent to Rs 2,150 crore in the year 2015-16 as the company could not reduce the debt levels. GVK hopes to close the sale transaction in the second half of this financial year.
Currently, the company has completely shut itself from bidding for any new project as it has been focusing more on managing the working capital requirements and reducing the debt, according to a senior official of the company. The company official said they might see recovery in company's performance from the next financial year onwards.
