GMR Infra sees reduction in debt by end of FY17

A: Tenaga investment means a lot to the GMR Group in general and particularly to the energy sector per se. If we can see for the first time, after a very long time, you are seeing a very murky investor of quality of Tenaga is coming with such a significant investment of the size of Rs 2,000 crore. So, this also shows the success of the government reforms that are all being unleashed during the last three-four years. It is giving that confidence to the foreign investors and within that it is definitely finding GMR as a very attractive portfolio. So, it also signifies the long term growth opportunity for GMR Group itself in energy. This is the first point.

This is very important; significant because it is not only GMR Group per se but as a country itself energy sector is opening up. Naturally as it is out of Rs 2,000 crore subject to certain charges etc almost every paise will be going to reduce our debt. So, all the money will be going to reduce the corporate debt.

If I can tell you on the GMR Energy side the corporate debt was Rs 2,367 crore before the investment of Tenaga. Now, after this it will fall down to Rs 367 crore only. So, that shows almost like a nil corporate debt in GMR Energy balance sheet. So, that is important.

Third, it also shows that now having got a very strategic investor it also starts readying the group for a growth not immediately but at some point in time whether it is renewable or even operation and maintenance (O&M), Tenaga is specialised in even engine overhauling. So, definitely that opens up an opportunity for us. So, Tenaga investment in this variety is very significant.Anuj: Tell us how things are going to shape up because your company, a lot of your revenues get eaten up by interest costs and finally we have big ballooning net loss. Going forward by when do you see that net loss reducing maybe in FY18-19, if you have any timeline.

A: Before getting into the future let us see how the group has changed during the last two-three years. So, it is very critical to us to understand how the group has changed. If you can recall GMR Infrastructure as such our peak level debt was around Rs 42,000 crore. By March 2016 it had fallen down to Rs 40,000 crore and with the announced Maldives settlement as well as Tenaga I will be happy to say that it will fall down to around Rs 36,000 crore. So, you can see as gross debt level itself it would be falling more than 15 percent and March 2017, though I am not free to tell straight the numbers, you can see a further reduction in the absolute debt levels itself. This is the first and most significant ever.

However, coming to the corporate debt itself which we have always been emphasising, the peak level corporate debt was Rs 7,500 crore. It fell down for March 2016 to Rs 6,400 crore. Now after Tenaga investment it will fall down to Rs 4,500 crore. In the last two years we have reduced the corporate debt by more than 40 percent. So, there will be a significant reduction in the absolute debt levels as well as the corporate debt levels.

We have been talking about the turnaround. Last time also when I was on the channel I said that GMR has already turned around.

Sonia: Any plans to monetise either the Delhi land parcel or the Hyderabad project, any time soon?

A: I will come to that; I will come to the specific thing. Because important thing is that when we talked about the turnaround we had announced that certain things will embark on investment holiday, we will sell, we will resort to divestment of the assets, we said we will get fresh equity, strategic investor everything whatever we had promised to your viewers and promised to the investors we have achieve it now and that it he important part of it.

Coming to the specific thing, going forward we still have a lot of action to understand. We have got still our road portfolio; we will be able to see certain actions on that. We have got a very large land parcel in the urban infrastructure. Not only the land what we are seeing in Delhi airport, we have got significant investment in Kakinada and Krishnagiri zones which we have got - that land is available. I can see that you will be able to see lot of action in those areas now because we are focussing each and every segment step by step. We have now revived the entire energy sector; it will be on its own now. Now we will be focussing on other areas.

Latha: But will that happen in FY17, do you think we will be able to hear about any of the land parcel sales either at Kakinada or at Delhi airport or at Hyderabad airport?

A: Absolutely, in this coming year you will definitely be seeing a lot of action on these things.

Latha: Are you looking at any of the Scheme for Sustainable Structuring of Stressed Assets (S4A) kind of - today we got the news that HCC has been approved by the IBA panel. So, are you in conversation? Is there anything that we can hear?

A: We have already done whatever was, for example in the schemes, we have already done our 5/20, we have done strategic debt restructuring (SDR), we have done everything whatever the government has announced. S4A also is under panel but we have got all the three or four schemes which are available for us. I can only assure that we will be applying all the measures available to us in all our assets - that's what I can promise you. When exactly we will do, which asset we will do I will not be able to tell that.

Latha: GMR Energy is operating at what plant load factor (PLF)? How much of capacity are you able to use?

A: Last year both EMCO and Kamalanga they all worked at around 70-75 percent. So, this year also it should be in the same level subject to certain lean periods. I think we should be able to achieve the same levels of PLF.