Lenders to convert GMR’s subsidiary debt into equity

MUMBAI: Lenders to GMR Rajahmundry Energy has initiated strategic debt restructuring ( SDR) which will results in banks acquiring majority stake in the company.

GMR Rajahmundry Energy is a wholly owned subsidiary of GMR Infrastructure and has debt of Rs 3780 crore. Following the SDR, the company’s Rs 1414 crore of debt would be converted into equity. The lenders would hold 55% stake while balance 45% would be held by GMR.

The company said that the move follows absence of long term Fuel Supply Agreement (FSA) and long term Power Purchase Agreements (PPA), the consortium of lenders of GREL have adopted the Strategic Debt Restructuring Plan (SDR).

In a statement to media, the company has said that post conversion, balance debt of around Rs 2,366 cr would be having repayment period of 20.5 years comprising of moratorium of 1. 75 years and interest rate of 10.75%. After SDR, the total equity in the project would be Rs 2,571 cr resulting in the debt-to-equity ratio of 0.9x.