In a move that will further reduce its ballooning debt, GMR Infrastructure has divested 30% stake in GMR Energy’s assets to Malaysian power utility Tenaga Nasional Berhad for $300 million (Rs 2,000 crore). The management of GMR Infrastructure Ltd on Monday approved the stake sale.
Tenaga is the largest power producer in Malaysia, with a presence across generation, transmission & distribution. With a total installed capacity of 10,818 megawatt (MW) and 50% marketshare of the Malaysian grid’s generation capacity, it has the backing of the Malaysian government. It has experience in managing and operating power assets all over Southeast Asia, South Asia and Turkey.
Kiran Kumar Gandhi, corporate chairman, GMR Group, said in a conference call that “the incoming strategic partner Tenaga brings significant expertise in operations and development across the energy value chain, which covers distribution, transmission and generation.”
After the completion of the deal, GMR Energy’s debt is likely to come down by Rs750 crore. The company currently has a debt of around Rs2,750 crore.
The reduced debt will also help the company save Rs200-250 crore in interest payment annually, Grandhi said.
“Tenaga will have right to invest in the remaining energy assets within the next five years. All the future business opportunities in energy by Tenaga will be through this platform,” he added. This means Tenaga will have the right to invest in Chhattisgarh and other assets of GMR Energy at any time within the next five years.
GMR Energy manages a balanced portfolio of coal-based, gas-based and renewable (hydro and solar) power projects, having a total capacity of 4,630 MW. This includes an operating capacity of 2,300 MW and pipeline capacity of 2,330 MW.
“India’s sustained economic growth will require collaboration from all stakeholders in the power sector. The Prime Minister has set a vision of 24x7 power for all by 2022... We believe this partnership is one of the steps to implement that vision,” GMR Group chairman GM Rao said.