GMR group sold its 70% in GMR Energy FPM Power Holdings for 660 million Singapore dollars, earning a profit of Rs1,356 crore
Cash-strapped GMR group said it sold its 70% interest in GMR Energy (Singapore) Pte Ltd to FPM Power Holdings for an equity value of 660 million Singapore dollars (S$). Out of this, FPM Power would invest S$60 million in GMR Energy as balance equity, the group said in a release.
GMR said, “this sale translates to an enterprise value of S$1,612 million (or $1,293 million) for GMR Energy on project completion by end 2013. The transaction, expected to close by end of March 2013, is subject to approval from the project finance lenders to GMR Energy. This divestment of our stake results in a profit of Rs1,356 crore and releases capital of around Rs1,616 crore.”
GM Rao, chairman of the GMR Group, said, “The divestment is the offshoot of the Group’s well thought out strategy of an Asset Right-Asset Light and Cash Flow based model that the Group has embarked in the recent times. This is the second such strategic move after last month's divestment of 74% stake in the GMR Jadcherla road project at a premium. The cash flows will help GMR Energy to focus on our domestic energy business and accelerate ongoing projects totalling to 5790 MW.”
GMR Infrastructure, which manages three airports, five power generating stations and five highways, is deep debt of Rs37,000 crore under a gearing of 3.5 times. It is looking to slash this number by Rs10,000 crore during next fiscal through its “asset light - asset right - asset churn” strategy.
For the quarter to end-December, GMR reported a net loss of Rs217 crore while its consolidated revenues increased 7% to Rs2,378 crore.
GMR Infrastructure (Singapore) Pte Ltd owns 66.4% of GMR Energy and 3.6% is held by GMR Infrastructure. Petronas, which holds the balance 30% stake would continue to stay invested in the project.
FPM Power is a 60:40 joint venture between First Pacific Co and MERALCO Power Gen Corp, a wholly-owned subsidiary of Manila Electric Company.
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