GMR Infrastructure group's CFO Madhu Terdal told Rachita Prasad that the company is looking at more divestments and will focus on its air port business for growth in the new innings.
You were one of the most indebted firms. How are things looking now?
Our turnaround story is almost completed. We had three stressed assets in energy. Chhattisgarh and Rajahmundry have been restructured and we have refinanced our Indonesian coal asset and the recovery in coal prices is helping too. Airport business debt is no tension. We have Rs 3,900 crore of debt which can be dealt with the Rs 2,000-3,000 crore we aim to raise from divestment.Our Delhi and Hyderabad airport subsidiaries are giving dividends.
What's the further scope for divestment and debt reduction?
Our cost of borrowing has reduced from over 12% at the beginning of FY17 to 10.5% now. Every 1% reduction leads to around Rs 300 crore net impact. In FY18, we aim to raise Rs 1,000-2,000 crore from monetisation of our land in Kakinada and Krishnagiri. We have already signed pacts for Kakinada SEZ. We have four more roads which can be divested and it could fetch us Rs 400-600 crore.We have already signed an agreement to sell stake in our Indonesian coal mine asset, we would get around Rs 350 crore from the deal in the next two months which will reduce debt by Rs 300 crore. If the market improves, we may go for GMR Energy's initial public offer (IPO). In the energy business, on one hand we have reduced the leverage, on the other we have improved operations and managed to establish a business which has Rs 7,000-crore valuation.
Any plans for value unlocking in airport business?
We feel the airport business has not reached the right value and there is a lot of ground to be covered before an IPO. We will continue talking to strategic investors, financial investors and funds but we don't have a timeline. This business is our most powerful weapon so we will use value unlocking opportunity very judiciously.
05/06/17 Rachita Prasad/Economic Times
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You were one of the most indebted firms. How are things looking now?
Our turnaround story is almost completed. We had three stressed assets in energy. Chhattisgarh and Rajahmundry have been restructured and we have refinanced our Indonesian coal asset and the recovery in coal prices is helping too. Airport business debt is no tension. We have Rs 3,900 crore of debt which can be dealt with the Rs 2,000-3,000 crore we aim to raise from divestment.Our Delhi and Hyderabad airport subsidiaries are giving dividends.
What's the further scope for divestment and debt reduction?
Our cost of borrowing has reduced from over 12% at the beginning of FY17 to 10.5% now. Every 1% reduction leads to around Rs 300 crore net impact. In FY18, we aim to raise Rs 1,000-2,000 crore from monetisation of our land in Kakinada and Krishnagiri. We have already signed pacts for Kakinada SEZ. We have four more roads which can be divested and it could fetch us Rs 400-600 crore.We have already signed an agreement to sell stake in our Indonesian coal mine asset, we would get around Rs 350 crore from the deal in the next two months which will reduce debt by Rs 300 crore. If the market improves, we may go for GMR Energy's initial public offer (IPO). In the energy business, on one hand we have reduced the leverage, on the other we have improved operations and managed to establish a business which has Rs 7,000-crore valuation.
Any plans for value unlocking in airport business?
We feel the airport business has not reached the right value and there is a lot of ground to be covered before an IPO. We will continue talking to strategic investors, financial investors and funds but we don't have a timeline. This business is our most powerful weapon so we will use value unlocking opportunity very judiciously.
05/06/17 Rachita Prasad/Economic Times
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