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P B Jayakumar
GMR Energy will soon raise over Rs 1,600 crore from a group of private equity players led by Singapore-based Temasek Holdings and banks to fund its expansion. The company is a subsidiary of the G M Rao-led GMR Infrastructure that has interests in highways, airports, agri-business and urban infrastructure.
GMR Energy is setting up thermal and hydro power projects of close to 4,500 Megawatt (Mw) capacity. At present, it generates over 780 Mw of power. Sources said the Bangalore-based company would allot preference shares to the private equity players and ICICI Bank, which has committed about Rs 300 crore. Preference shares are special equity securities that have properties of both equity and debt instruments, but lack voting rights. Holders of such shares enjoy priority over holders of common stock when it comes to payment of dividend and upon liquidation.
The allotted shares will be converted into equity when GMR Energy launches its initial public offer (IPO). The company had planned to launch an IPO to raise funds last year, but deferred the decision following the crash in the stock markets due to the global slowdown.
GMR Infrastructure had raised Rs 500 crore by issuing non-convertible debentures to ICICI Bank earlier this month to fund its infrastructure projects. Sources said GMR Infrastructure was likely to announce the deal “in a couple of days”. A top executive of the company declined to comment on the issue, citing confidentiality agreements.
GMR Energy requires about Rs 7,500 crore to fund the equity portion for nine projects, which require a total investment of over Rs 30,000 crore over the next three-five years.
“We have already invested over Rs 1,000 crore and have a cash balance of another Rs 1,000 crore. The funds, which we are going to raise now, will meet requirements for a few projects nearing financial closure,” an executive said.
The company’s special purpose vehicle GMR Kamalanga Energy, which is setting up a 1,050-Mw coal-based power project with an investment of Rs 4,540 crore at Kamalanga village in Dhenkanal district of Orissa, had achieved financial closure last year. The debt component of Rs 3,405 crore was tied up from a consortium of 13 banks led by IDFC Ltd and the equity portion of Rs 1,135 crore was tied up between GMR Energy and IDFC in the ratio of 80:20. This project is in advanced stages of development and is expected to go on stream by the end of 2012.
GMR Energy is also setting up a 1,200-Mw coal-based thermal power plant at Raipur in Chhattisgarh and is augmenting capacity of its Vemagiri gas-based power plant at Rajahmundry in Andhra Pradesh, from the current 388 Mw to 768 Mw.
Last year, the company had acquired Emco Energy, which is developing a 600-Mw coal-based power plant in two phases of 300 Mw capacity each in Warora, Maharashtra.
Besides, GMR Energy has plans to develop five hydro electric projects between 2014 and 2020 in Himachal Pradesh, Uttarakhand, Arunachal Pradesh and Nepal.
Its 300-Mw Alaknanda Hydro electric power project in Uttarakhand is scheduled to go on stream by 2014. It is also developing a 160-Mw Talong hydro power project in the district of Seppa, on the Kemeng river in Arunachal Pradesh on a build, own, operate and transfer basis. This project is scheduled for commissioning by 2015.
GMR Energy also holds 80 per cent stake in Himtal Hydropower Company, which is developing a 250-Mw Upper Marsyangdi hydroelectric project on the Marsyangdi river in Nepal. The project is scheduled to be commissioned by the end of 2016.
It is also developing a run-of-the-river 180-Mw Bajoli Holi project on the river Ravi in Chamba district of Himachal Pradesh. In addition, a consortium of GMR Energy, GMR Infrastructure Ltd and Italian-Thai Development Project Co have an memorandum of understanding with the government of Nepal for developing a 300-Mw Upper Karnali hydro electric project in Nepal, on a BOOT basis.