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GMR Infrastructure has inked a foreign currency convertible bond private placement deal with Kuwait Investment Authority (KIA), a sovereign wealth fund, for $300 million (about ₹2,000 crore).
Settling debt The FCCBs, with a 60-year tenure and due by the year 2075, will carry a 7.5 per cent coupon rate.
This being a convertible bond issue, the bonds can be converted into shares after 18 months, according to the terms of the agreement with the investor. The initial conversion price of the optional conversion is ₹18 a share, according to a regulatory filing made with the stock exchange.
The debt-laden diversified infrastructure company has raised the funds to service part of its debts.
The board of directors of the company had passed a resolution on August 13, and at the AGM on September 23, shareholders approved the proposed fund-raising for an aggregate amount of up to ₹2,500 crore or equivalent thereof by way of equity shares/GDR/ ADR/ FCCB, etc, in one or more tranches either in Indian rupees or foreign currency.
Partner in growth “This is the largest bilateral investment of KIA in India. This investment shows confidence of sovereign investors in the long-term policies being implemented by the government, particularly in the infrastructure space,” said Group Chairman GM Rao.
Farouq Bastaki of KIA said: “We look forward to participating in GMR’s growth as a long-term investor and build a deeper relationship.”
Deutsche Equities India acted as the Financial Advisor to GMR and Citigroup Global Markets India as the financial advisor to Kuwait Investment Authority.
The GMR Group has adopted an ‘Asset Light, Asset Right” strategy and has divested stake in several of its projects, including in an overseas airport, some road and a power project, all aimed at bringing down debt.
While GMR Infra has a consolidated debt of about ₹45,000 crore, the funds being raised are aimed at addressing the standalone debt of the company, which is about ₹6,900 crore.
On Friday, the GMR Infra scrip closed at ₹15.45, down 15 per cent, on the BSE.
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