2024-10-23 20:37:10 :
MUMBAI: GMR Enterprise Private Limited (GEPL), the promoter entity of GMR Group, on Wednesday said it will refinance its existing debt $Abu Dhabi Investment Authority (ADIA) provides Rs 63 billion credit line.
According to a press statement, the financing facility will help GEPL consolidate all its debt into one facility and reduce its pledge of shares in the group’s listed airport companies.
GEPL holds a 25.4% stake in GMR Airports Ltd (GAL), a listed company that operates the Delhi and Hyderabad airports. According to BSE data, 58.3% of GEPL’s stake in GMR Airports is currently pledged.
“GEPL has had debt on its books for some time. It didn’t have the cash flow to repay the loan, so it kept compounding and borrowing costs started to rise,” said a person familiar with the matter who asked not to be named.
zero interest loan
The structured debt financing will be a zero-interest loan with a term of eight years and an interest rate of between 13% and 15%, the person said. It will be backed by listed GMR Airports shares.
The person added that the loan would not only lower GEPL’s cost of capital but also reduce its refinancing risk. The sponsor company’s current cost of borrowing cannot be determined.
“We have successfully reduced a significant amount of corporate debt in recent years,” GMR Group Chairman Kiran Grandhi said in the above press statement. “This investment from Abu Dhabi Investment Authority will help repay all of GEPL’s external debt and strengthen our support for GAL.” The ability to continue to grow.”
The financial cost of GEPL is $866 crore in FY24, higher than $8.4 billion in FY23, according to its annual report for FY24. The company recorded losses $592 crore in the financial year 2023-24.
Indirect contact with airport business
For Abu Dhabi Investment Authority, the investment will give it indirect exposure to India’s lucrative airport business. If the borrower fails to repay at the end of the loan term, investors can choose to convert the debt into equity in the company, the person said, without elaborating further.
Khadem Al Remeithi, Executive Director, Infrastructure Sector, ADIA, said: “The Indian aviation industry has strong growth prospects, supported by the positive long-term fundamentals of the Indian economy, and GMR Group is one of the leading airport operators in the country.” Press statement . “This investment is consistent with our approach to supporting entities that are developing world-class transportation assets that benefit from population growth and increased economic connectivity.”
Shares of GMR Airports closed up 2.21% on the BSE on Wednesday. $82.2. In comparison, the BSE Sensex closed 0.17% lower.
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