GVK Power Gains on Optimism It May Sell Asset Stakes to Pay Debt
GVK Power & Infrastructure Ltd. (GVKP), controlled by Indian billionaire G.V. Krishna Reddy, gained a second day in Mumbai on speculation it will sell stakes in assets to repay debt.
Shares of the builder of utilities and airports rose 3.8 percent to 17.95 rupees at the close, extending yesterday’s 8.1 percent gain. The stock has risen 55 percent this year, outpacing the 15 percent increase in the key Sensitive Index. (SENSEX)
The company explores various options to buy or sell stakes in businesses in the normal course, GVK Power said in a stock exchange filing yesterday. No agreement has been signed to sell stakes in its airport or oil and gas businesses, it said.
“While denying that they are in agreement for a stake sale, the GVK Power management indicated it has various options open,” said Pramod Amthe, an analyst with RBS Equities India Ltd. “Investors may still be hoping that these transactions will materialize.”
GVK Power chief financial officer A. Issac George declined to comment when reached on his mobile phone.
GVK Airport Holdings Pvt., the unit that operates the Mumbai and Bangalore airports, increased its stake in the properties last year. GVK Power has a total debt of 69 billion rupees ($1.4 billion), according to data compiled by Bloomberg.
GVK Power is in talks with BG Group Plc (BG/) for a possible sale of its stake in seven oil and gas blocks, Mint newspaper reported yesterday, citing two unidentified people familiar with the development. The Indian company is looking to raise $1.1 billion to invest in power and other businesses, according to the report.
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