GVK to dilute stake by 15-20% in GVKPIL

The Hyderabad-based grp is exploring options to dilute 15 to 20 per cent of promoters stake, reports Indulal PM.

The GVK Group is planning to dilute its stake in the power and infrastructure company GVK Power and Infrastructure Ltd (GVKPIL). This company is undertaking the modernisation of the Mumbai airport and four major power generation projects in three states.

After deciding to consolidate all its infrastructure entities under the GVKPIL umbrella, the Hyderabad-based group, is exploring options to dilute 15 to 20 per cent of promoters stake.

The company board has already approved to raise funds for the capital expenditure of the ongoing power and infrastructure projects. It would be either a GDR issue or a follow on issue, sources close to the development said.

The company recently consolidated its power and infrastructure assets to one single entity, GVK Power and Infrastructure Ltd (GVKPIL). The consolidation, which is awaiting approval of the courts, is set to increase the company's asset base to Rs 20,000 crore from the current Rs 3,500 crore.

It would also put the promoters holding in the company close to 85 per cent, which was earlier at 64 per cent. The company is planning to bring the promoters stake to 65 per cent, either by selling stake or issuing fresh equity.

When contacted GVK chief financial officer Issac George told Hindustan Times, "Of course, we are planning a certain kind of fund raising. But it is too premature to talk about the instrument of funding."

"However, the company board has approved an 'enabling provision' to raise upto $500 million" he said.

About the restructuring, George said six of the group companies would be merged but some special purpose vehicles will remain as subsidiaries of GVKPIL. "GVK Airport Developers, which has made an equity investment in the MIAL will be merged into GVKPIL," he said.

The companies being merged are GVK Airport Developers Pvt. Ltd, Alaknanda Hydro Power Company Limited, GVK Power (Goindwal Sahib) Limited, Goriganga Hydro Power Private Limited, GVK Jaipur Expressway Private Limited (GJEL) and GVK Coal (Tokisud) Company Private Ltd.

Besides the Rs 5,400 crore airport development programme, GVK group has undertaken three hydropower projects in Uttaranchal with a combined capacity of 700 mw, and a 600 MW thermal power plant in Punjab.

Email Indulal PM: indulal.pm@hindustantimes.com

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