GMR sells 51 per cent stake in road projects to joint venture partners

GMR Infrastructure informed stock exchanges that in line with GMR group’s asset right and asset light strategy, GMR Highways and GMR Infrastructure have signed a share repurchase agreement with joint venture partners to divest its 51 per cent equity stake in GMR OSE Hungund Hospet Highways (GOHHHPL). This is the third major divestment in GMR Group's road portfolio.

GMR OSE operates the Hungund-Hospet section of National Highway No. 13, which is a 99-kilometre (km) project in Karnataka, which was won by the GMR OSE consortium in 2010 on 'design, build, finance, operate, and transfer' basis.

The company is looking at reducing its debt through a sale of stakes. The debt of the company for year ending March 2015 stands at Rs 42201.56 crores, an increase of 7.70 percent from the previous year; which is 63.23 percent of the total assets of the company. Divestment of this asset will also reduce the debt by about Rs 1078 crores on fully consolidated basis and also the said sale consideration of Rs 85 crores would enhance the liquidity. The debt reduction can help the company in improving its financials.

In terms of financials the total consolidated operating revenue of GMR Infra on year ending March 2015 stands at Rs.11087.68 crores, an increase of 4 percent on yearly basis. The EBITDA of the company stands at Rs.2554.64 crores, a decrease of 0.40 percent; and EBITDA margin is 23.08 percent as compared to 24 percent for same period last year. The company faced a net loss of Rs.2967.40 crores in FY 2015. The stock is trading at Rs 11.90, an increase of 1.19 percent from the previous close.

GMR Infrastructure (GIL) is engaged in the generation of power; mining and exploration activities; development of highways; infrastructure development, including development and maintenance of airports and special economic zones; construction business, including engineering, procurement and construction (EPC) contracting activities; and operation of airports and special economic zones. The company operates through other segments as well, including airports, ower, roads, EPC and others.