Joining a host of companies that are putting assets on sale to reduce debt, GMR Infrastructure Ltd is all set to sell its road projects, three people familiar with the development said. The company has already initiated talks with investment bankers and consultants to oversee the sell-off, they added.
GMR currently has nine highway projects in its portfolio totalling 730 km. It has invested `6,000 crore in the projects till date.
As on September 31, 2015, the company’s debt stood at around `43,440 crore.
The company did not respond to HT’s requests for comments.
Strategic developers, global private equity and pension funds have shown interest in the projects, according to sources.
“The focus of the group continues to be creating liquidity and reducing leveraged position for the benefit of all stakeholders, which is why it is planning to sell road assets,” another source said. “GMR has taken a decision not to bid for any new road projects.”
Not just this, the current employees’ strength in its highway division is also at its low. “There are only a few people, that too the ones required to facilitate these deals,” sources added. However, the current strength could not be independently verified.
GMR has already offloaded stakes in two of its projects – the company sold 74% in Jadcherla Expressway Ltd to SBI Macquarie and another 74% stake in GMR Ulundurpet Expressways Pvt Ltd to India Infrastructure Fund Ltd (IIFL) of IDFC Ltd.
Delays in regulatory approvals, land acquisition problems and funding crunch lead to high borrowing costs, putting pressure on highway developers.
“Almost every infrastructure major has plans to sell assets. Especially highway developers, who are not seeing good toll revenues and have invested in these projects at very high premium,” said Vishwas Udgirkar, senior director, Deloitte Touche Tohmatsu India Pvt. Ltd.