Shares of GMR Group entity GMR Power and Urban Infra are sharply higher on April 15, rising by over 7 percent after the company announced plans to deleverage its balance sheet by close to Rs 4,400 crore via divesting stake in non-operating and stressed assets.
GMR Power said in an exchange filing on April 14 that it will be spinning off gas plants and stressed assets, a move that will improve the bottomline of the company.
GMR Energy (GEL) and GMR Generation Assets (GGAL) subsidiaries of the GMR Power have agreed on a framework with Synergy Investments Holding to divest their respective stakes in a 180 MW hydro-electric power project (GMR Bajoli Holi Hydropower), GMR Vemagiri Power - that owns a 388 MW gas-based power plant, along with GMR Rajahmundry Energy (GREL), a company that owns a 768 MW gas-based power plant, the official statement by GMR Power and Urban Infra said.
"This transaction will enable the Company to meet the proposed One-Time Settlement (OTS) with the lenders of GREL, de-lever the balance sheet by ~INR 4400 crore and spin off the non-operational gas plants and stressed assets of the GMR Group. This will further improve the bottom line of the Company," the statement said.
As per the framework, GMR Group will be undertaking the following set of actions:
-GMR Energy will transfer 79.86% of the equity shares of GMR Bajoli Holi Hydropower in two tranches (70% in the first tranche and 9.86% in the second tranche) and relevant GMR Group entities will transfer 100% of the Compulsorily Convertible Debentures issued by Bajoli Holi to Synergy.
-GMR Energy will also transfer 51% of the equity shares in Vemagiri Power to Synergy
-GMR Generation Assets will transfer 51% of the equity shares of GMR Rajahmundry to Synergy upon completion of the proposed settlement.
GMR's Rajahmundry and Vemagiri power plants have been non-operational due to unavailability of affordable natural gas to run the plants.
The consolidated consideration base on the transfer of securities after the transactions as part of the framework agreement is Rs 653 crore, subject to working capital and other adjustments. The transaction is expected to be completed on or before September 30, 2025 or a date mutually agreed by the parties.
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