GVK Runs Out of Power, Mulls 49% Stake Sale

HYDERABAD: Saddled by a consolidated debt of over `22,000 crore, city-based GVK Power & Infrastructure Ltd  (GVKPIL) said it was considering putting 49 per cent stake at the holding company level on the block.

The company has been scouting for potential buyers to sell all its road assets for sometime. It has also expressed intent to list its airports business, which contributed 77.35 per cent to the company’s overall income in FY14.

“It’s (debt pile) a matter of concern. Power projects are stranded due to lack of fuel supply ... they are not yielding revenue. We have to find a way out and we are exploring all options, including QIP or an IPO or even selling our assets,” A Issac George, Director and CFO, GVKPIL told Express. He added that though board approval and documentation for a Qualified Institutional Placement (QIP), where fresh shares are issued to premium investors, were in place, the company would wait for the ‘right time.’ “We have decided to sell all our road assets...but we will not hesitate to sell other assets if there’s a buyer. Or for that matter, we will not shy away from selling up to 49 per cent stake at the holding company level,” George said adding the company’s promoters would prefer to maintain controlling stake of 51 per cent. According to him, there’s investor interest, but the company was yet to get the valuation done. “As for valuation, we are not aiming for the moon. We are looking at a reasonable exit,” he said.

Lack of natural gas supply to GVK’s Jegurupadu II and Gautami power projects since March, 2013, forced the company to put both the plants under long-term preservation mode. Consequently, revenues from power business plunged 78 per cent from `1,666.31 cr in 2011-12 to `366.98 cr in 2013-14.