GMR to Sell Stake in Select Power Plants to Tenaga

  • Malaysia's Tenaga Nasional to buy 30% of GMR Energy plants
  • GMR Infrastructure said it will use funds to repay debt

GMR Infrastructure Ltd., which runs India’s biggest airport, will sell part of its holdings in power generation units to Malaysia’s Tenaga Nasional Berhad for $300 million as it seeks to reduce debt.

Tenaga will buy 30 percent of GMR Energy Ltd.’s select portfolio of assets, the Bangalore-based company said in an exchange filing.

GMR has been selling assets to slash debt, which totaled 434.4 billion rupees ($6.5 billion) at the end of September. The transaction comes after Jindal Steel & Power Ltd. said last week it plans to raise 30 billion rupees selling non-core assets to reduce its liabilities.

“The deal will help deleverage GMR’s balance sheet and help in faster execution of projects in the pipeline,” said Vibhor Singhal, an analyst with Phillip Securities Pte. in Mumbai. “The de-leveraging exercise will continue. It’s a matter of time before they sell a stake in the airport project.”

The sale will lower GMR Energy’s corporate debt by about 20 billion rupees to 7.5 billion rupees, GMR Group Chief Financial Officer Madhu Terdal said in a conference call with reporters on Monday.

Tenaga will buy stakes in GMR Energy’s power plants that have a combined capacity of 4,630 megawatt, he said. This includes 2,300 megawatts of operating plants and 2,330 megawatt pipeline capacity, GMR Group Corporate Chairman Kiran Kumar Grandhi said. “Tenaga will have the right to invest in the others assets of GMR Energy such as Chhattisgarh project and Indonesian assets,” he said on the call.

GMR, which has a consolidated corporate debt of 63.75 billion rupees, will continue to seek ways to reduce the liability, Grandhi added.

GMR sold its 40 percent stake in Istanbul’s Sabiha Gokcen Airport for 17.4 billion rupees in 2014 and divested a 70 percent stake in a Singapore power station development to a venture between First Pacific Co. and Manila Electric Co. for S$600 million in March 2013.

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