GVK Power and Infrastructure (GVKPIL) has narrowed its net loss by 90% to Rs71 lakh for Q3 ended December 31 on a stand-alone basis, compared to a net loss of Rs 6.8 crore ayear ago. Total income has increased to Rs 18.42 crore from Rs16.92 crore a year ago.
In a statement, GV Krishna Reddy, CMD, said there has been delays in development of coal mines in an overseas project where the company has provided guarantees and commitments for the borrowings, losses incurred by gas-based plants in the absence of gas and litigations on rights to claim capacity charge, cancellation of coal linkage to coal-based plant and re-negotiation of terms of PPA of coal-based plant. As on December 31, 2016, the company had accumulated losses, and the company has incurred losses during the preceding two years. The company has delayed payment of loans and interest and certain loan accounts have been classified as non-performing by banks.
However, GVK Coal is in discussion with non-controlling shareholders to realign the option exercise dates, looking for additional funding from potential investors and working with lenders to reach to optimal solution.
The prices of coal have significantly fallen since GVK Coal had acquired stake in the coal mines. GVK Coal has not been able to achieve financial closure resulting in delays in commencement of mine development activity when compared to scheduled date, delays in entering into definitive agreement for port and rail development and agreement for sale of coal.
Further, certain lenders of GVK Coal have classified the loan as non- performing and the lenders had abridgement
option on the loans either on October 2015 or every year thereafter. The lenders have not yet exercised the option for repayment of the loan.