GVK Power & Infrastructure Ltd today highlighted that the company plans to focus on consolidating its existing business and reducing its debt, even as it steps up efforts to secure fuel supplies for its coal and gas-based projects.
GVK Reddy, Chairman, GVK, assured the shareholders’ that the focus is on divestment of some of its assets and pare debt which will drive bck the company to profitability and growth path.
Answering queries from members at its 22nd AGM, Reddy said the company had posted a loss of ₹964 crore and income of ₹4,165 crore during 2015-16.
He attributed the loss mainly due to lack of supply of gas to the gas-based power plants, one- time write-off of investment in oil & gas and increase in finance cost on the funds borrowed for acquiring the airport assets.
Highlighting the tough times due to external factors such as lack of fuel supplies to its completed projects, he said the focus is on ensuring fuel supplies to existing gas projects and coal-based Goindwal Sahib thermal power project. The company had earlier this year divested stake in the Bangalore International Airport Ltd to Prem Watsa-headed Fairfax Holding, wherein it expects to secure ₹2,169 crore. Once completed, this deal will help bring down the holding company debt of ₹4,000 crore to about ₹2,000 crore.
In addition to this, the company is at advanced stage of finalising a deal to divest the Deoli-Kota Road project.
Isaac A George, Chief Financial Officer, GVK, said: “We have stopped looking at new projects till we bring down the company debt of ₹22,500 crore. We will be able to achieve progress once we conclude the Bangalore airport deal with Fairfax after regulatory approvals, and divestment of a road project. These will help bring down debt.”
GV Sanjay Reddy, Vice-Chairman , said the company has first right of refusal for the Navi-Mumbai airport project where there are three other bidders.
Other bidders
The bidders have raised a number of queries about the bidding process, which have gone up to over 700. “If all these get addressed in time, we are given to understand by the government that the deal will be concluded by December 2016,” he said.
Referring to the Goindwal Sahib thermal power plant, Sanjay Reddy said that efforts are on to convince the government that Tokisud coal block was awarded and then cancelled subjecting the plant to difficulties.
“We are in talks with the government to convince them to reallocate linkage as is done for other power projects,” he said.