GMR Infrastructure in talks to raise $300 million via stake sales in road assets

BANGALORE: GMR Infrastructure is in talks with private equity investors to raise $250-300 million through stake sales in some of its road projects, two people with direct knowledge of the matter said.

The Bangalore-based infrastructure company, which is looking to sell up to 26% stake in road projects, is in negotiations with SBI Macquarie, 3i Group Plc, Standard Chartered Pvt Equity, Blackstone and IDFC Project Equity.

"Although the current market sentiment is not conducive, GMR hopes to close the transaction by March-end," one of the people quoted above said. "The company is diluting its holding to fund capital expenditure of over $1 billion in roads business."

The raised funds would also help GMR achieve financial closure of the 7,500-crore highway it is constructing to link Kishangarh in Rajasthan with Ahmedabad in Gujarat. The company, which had won the highway project in October last year, needs to achieve its financial closure by the end of next month.

GMR refused to confirm or deny the development. "We do not comment on speculative transactions until they reach a definitive stage," it said in an email reply.

While SBI Macquarie, 3i Group Plc and IDFC Project Equity refused to comment on the story, emails sent to Standard Chartered Pvt Equity and Blackstone did not elicit any response.

GMR's highway business consists of six operating road assets totalling 1,684 km. The company also has three toll and annuity projects under construction totalling 4,624 km.

GMR's road division contributes a tenth of its annual revenue. The highway segment posted a loss of 1 crore in the third quarter of 2011-12 as compared to a loss of 11 crore in the year-ago quarter.

The company, which has 320 crore of pending debt on the 515-km Faruknagar-Jadchelra toll project, received approval from IFCL to convert it into a partial guarantee bond. It plans to convert the debt by March, the company had earlier said. GMR has been on a fund raising spree for more than a year.

In July last year, GMR Airports Holding raised $131 million through an issue of compulsorily convertible preference shares that can be converted at the time of public offer. It had also raised $200 million from Macquarie SBI Infrastructure Investments in 2011 for its airport business. In 2010, it raised $300 million through a private equity sale in GMR Energy.