GMR Chhattisgarh Energy (GCEL), a subsidiary of GMR Infrastructure (GIL), on Monday said that the consortium of lenders has converted debt to equity under the strategic debt restructuring (SDR) plan norm and added that banks now own a 52.4% stake. The company said that under the SDR scheme, of the total outstanding debt (including accrued interest) of R8,800 crore debt to the extent of R2,992 crore has been converted into equity and that 47.6% shares would be held by GMR following the conversion.
GCEL reported a net loss of R455 crore in FY16 on the back of R126 crore in revenues. Lenders to the company include Axis Bank, Central Bank of India, ICICI Bank, IDBI Bank, United Bank of India and Yes Bank. Following the conversion, the balance project debt stood at R5,800 crore with R2,992-crore equity held by lenders and R2,721 crore equity held by the GMR Group, resulting in the debt-to-equity ratio of one. “The lower debt levels would result in improving the long-term viability of the project,” it said.
GCEL is a 1,370-MW (2×685 MW) coal-based power plant in Raipur, Chhattisgarh and was fully commissioned in March 2016. It has long-term fuel security in the form of two captive coal blocks. The plant is currently operating under short term PPAs through exchange and bilateral routes.
In May last year, GMR Rajahmundry Energy (GREL), another subsidiary of GMR Infrastructure, had said that lenders have converted R1,414 crore debt to equity through SDR scheme and banks hold 55% stake in the company.
An SDR allows banks to convert debt at a price below the current market value and they can now own at least 51% or more of the equity of a company. In case of unlisted companies, a break-up value should be used which is the book value per share calculated from the company’s balance sheet adjusted for cash flows and financials post the earlier restructuring.
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So far, bankers have decided to implement the SDR scheme for more than a dozen companies — Electrosteel Steels, Jyoti Structures, Lanco Teesta Hydro Power, Monnet Ispat, IVRCL, Coastal Projects and Gammon India, among others. Reacting to the announcement, GIL shares on BSE rose as much as 7.2% in intraday trade and closed at R15.4, up 3.49% from its previous close.