GMR pares Rs1,078 cr debt by selling stake in road project to partner

The G M Rao-led GMR Infrastructure Ltd has removed Rs1,077.94 crore of debt from its books with the firm on Friday announcing it would sell a majority 51 per cent equity stake in its 99 km of highway projects in Karnataka to its joint venture partners, joining a host of infrastructure companies that are putting assets on sale to reduce debt.

Besides, the transaction will help the company enhance its liquidity by Rs85 crore as the company will receive the funds from the joint venture partners.

Two GMR group firms have signed a share purchase agreement with joint venture partners to divest a 51 per cent stake in GMR OSE Hungund Hospet Highways Pvt Ltd (GOHHHPL), said a company statement.

''GMR Highways and GMR Infrastructure have signed a share purchase agreement with its joint venture partners to divest its 51 per cent equity stake in GMR OSE Hungund Hospet Highways Pvt Ltd,'' the statement said.

''This transaction once again signifies the GMR Group's commitment and ability to successfully implement its 'Asset-Light-Asset-Right' strategy under challenging market conditions. We, at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets,'' Grandhi Kirankumar, corporate chairman of GMR Group, said.

GOHHHPL operates over 99 km of the National Highway-13 in Karnataka, which the GMR OSE Consortium won in 2010 on design, build, finance, operate and transfer basis.

The joint venture partners have bought a 14.99 per cent stake in the project from the group in the first tranche of sale.

The second tranche will be completed post approvals from the National Highways Authority of India, lenders of GOHHHPL and other closing conditions customary to such transactions, a company stated in a release, adding, the overall consideration for the sale is about Rs85 crore and that the sale consideration is about 1.1 times of book value of investment.

As of 30 September, GMR Infrastructure had debt of Rs43,439.60 crore.

This is the third major divestment by GMR which has adopted a strategy of raising funds via stake sale to pare debt and wants to have a 'asset light' business model. GMR Group has already offloaded stakes in two of its projects.