• GMR seeks Rs 8545 cr power project debt recast, Axis lead bank

    GMR Infrastructure Ltd has approached Axis Bank and 16 other lenders for strategic recast of the Rs 8545.85 crore debt of its special purpose vehicle operating the 1,370 MW thermal power plant at Raikheda in Chhattisgarh, an official familiar with the development told Moneycontrol. The project, comprising two units of 685 MW each, was delayed by two years, the commissioning of the project finally happening on March 31 this year. The plant has been plagued by cost overruns, delay in commissioning and lower load flood factor resulting in weak cash flows. This has stretched the start date of the repayment of interest, now expected to start only in February. A questionnaire on the matter e-mailed to GMR remained unanswered. The SPV — GMR Chhattisgarh Energy Ltd — is a fully-owned subsidiary of GMR Energy Ltd, the power sector arm of the Delhi-headquartered infrastructure major. The recast will result in the lenders converting part of the company’s debt into equity and the promoters giving up majority stake in the subsidiary, the official said. GMR has appointed SBI Capital Market Services Ltd as advisor on the debt restructuring plan. “SBI Caps is now preparing the corrective action plan. If all parties finally agree on implementing the scheme, the lenders will have to find a buyer within 18 months of taking over the project,” the official said. Including cost overruns, the total project cost has ballooned to Rs 11,561 crore, significantly higher than Rs 8,290 crore that were budgeted first. Power Finance Corp Ltd followed Axis in disbursing the largest amount to the project. Axis Bank gave the company Rs 1,092 crores in fund and non-fund-based lending. PFC lent Rs 1,090 crores for the project. Besides Axis and PFC, Bank of India, IIFCL UK and Life Insurance Corp of India Ltd are the other names in a list of 17 that have lent to the project. Bank of India has lent Rs 769.73 crores, IIFCL UK $101 mln and LIC Rs 481 crores. The company doesn’t have a long term power purchase pact for the plant yet, he said. While the project is now commissioned, the tough part now is to make it viable for the long-term. The company has two captive coal mines to fuel the project – Talabira-I and Ganeshpur. According to the official, something was that also pointed out earlier by rating agency ICRA Ltd, reserves of Talabira-I coal mine will be able to keep the plant running for not more than two years from now. In such a scenario, GMR has to start mining operations at Ganeshpur. The promoters have so far put in Rs 2,720 crore as equity with the power plant still needing equity of Rs 114 crore and the associated coal mine blocks requiring another Rs 94 crore, the official said. “Only on strength of Talabira, they can’t operate the plant and it is unlikely GMR will be able to start mining at Ganeshpur as it gave a negative bid for the mine when the auctions were conducted in 2015. This means it agreed to pay to the government for mining. If that doesn’t happen, the company’s bank guarantee of Rs 295 crore will be forfeited,” the official said. Jaron Brown Womens Jersey

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