MUMBAI: In its effort to reduce debt levels, GMR Group firm - GMR Power and Urban Infra Ltd (GPUIL) - is deleveraging stakes worth close to Rs 4,400 crore in non-operating assets by spinning off the gas plants and stressed assets.
This move, according to GMR, is also expected to strengthen the group’s financial health and also to meet the funding requirements towards the one-time settlement (OTS) with the lenders of GMR Rajahmundry Energy Limited (GREL).
GMR Energy Limited (GEL), a wholly owned subsidiary of GPUIL, and GMR Generation Assets Limited (GGAL), another subsidiary of GPUIL, have signed a framework agreement with Synergy Investments Holding Limited for the divestment of their respective stakes in GMR Bajoli Holi Hydropower Private Limited, GMR Vemagiri Power Generation Limited and GMR Rajahmundry Energy Limited (GREL). These firms operate natural gas-based power plants.
Synergy is neither part of the promoter group nor is it a related party to the GMR Group.
As per the agreement, GEL will transfer 79.86% of the equity shares of Bajoli Holi in two tranches (i.e., 70% in the first tranche and 9.86% in the second tranche) and the relevant GMR Group entities will transfer 100% of the compulsorily convertible debentures issued by Bajoli Holi, to Synergy.
GEL will transfer 51% of the equity shares of Vemagiri to Synergy and GGAL will transfer 51% of the equity shares of GREL to Synergy, upon completion of the proposed OTS.
The GREL and Vemagiri power plants have been non-operational due to the unavailability of affordable natural gas to operate the plants. The transaction is expected to be consummated on or before September 30, 2025, or such later date as mutually agreed by the parties to the transaction.
“This transaction will enable the Company to meet the proposed OTS with the lenders of GREL, deleverage the balance sheet by Rs 4,400 crores 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.”
Synergy is owned by a private equity fund managed by Synergy Capital, a strategic investment manager and advisor with offices in the UAE, Singapore and India.
Srinivas Bommidala, Managing Director of GPUIL, said that due to reasons beyond their control and non-availability of affordable gas, the gas plants have been non-operational since 2016.
“This consolidated divestment will help us to settle our obligations with the lenders of GREL. This transaction gives us the opportunity to spin off the stressed assets from the Group and focus on growing our platform with strong fundamentals.”
Sudhir Maheshwari, Founder and Managing Partner of Synergy Capital, said that Synergy Capital has previously invested in a 165MW natural gas-fired power plant in Thailand and has been actively looking for renewable energy investment opportunities in India.