Mar 28 2010 , Mumbai
GMR Infrastructure is in talks with Indian banks to raise $800 million (Rs 3,640 crore) to refinance the $1.1 billion debt taken to buy Dutch power utility InterGen, the biggest overseas acquisition in the sector by an Indian company.
ICICI Bank, IDBI Bank, SBI and Uco Bank are expected to participate in the refinancing, bankers privy to the talks told Financial Chronicle.
"GMR Infrastructure wants to realign its debt and optimise the cost of funds to scale up its operations efficiently. We are discussing various financing options with the company,” bankers said.
Confirming the move, the company said in an email that it had availed a loan of about $800 million for two years at the time of buying InterGen and it is due for refinancing in October. "We are looking at various options with banks to refinance this loan. The remaining portion of the debt, $301 million, is a long-term loan for six years.”
“Usually during mergers and acquisitions, since the time available is short, companies opt for short-term financing to explore long-term finance options at a later date,” it added.
GMR bought 50 per cent stake in InterGen from AIG Highstar Capital II LP, a fund owned by American International group. The stake has given GMR access to InterGen's 12 operating power plants in the UK, the Netherlands, Mexico, Australia and the Philippines, with annual sales of $1.65 billion.
This acquisition is expected to provide GMR a platform to expand in InterGen's footprint in new regions. InterGen has a gross capacity of 12,766 mw, including 4,680 mw under development.
Earlier this month, GMR raised Rs 500 crore by issuing non-convertible debentures to ICICI Bank to finance its infrastructure projects.
It is also in talks with private equity companies such as Singapore-based Temasek Holdings for investments of more than Rs 1,000 crore to finance its expansion programme. However, the company refused to comment on private equity participation.
GMR Energy, a group company, has plans to invest up to Rs 18,000 crore in the next three years to generate about 3,300 mw from its present capacity of around 800 mw. To finance this expansion, the company is eyeing corporate debt and private equity funds in addition to bank loans.
ICICI Bank, IDBI Bank, SBI and Uco Bank are expected to participate in the refinancing, bankers privy to the talks told Financial Chronicle.
"GMR Infrastructure wants to realign its debt and optimise the cost of funds to scale up its operations efficiently. We are discussing various financing options with the company,” bankers said.
Confirming the move, the company said in an email that it had availed a loan of about $800 million for two years at the time of buying InterGen and it is due for refinancing in October. "We are looking at various options with banks to refinance this loan. The remaining portion of the debt, $301 million, is a long-term loan for six years.”
“Usually during mergers and acquisitions, since the time available is short, companies opt for short-term financing to explore long-term finance options at a later date,” it added.
GMR bought 50 per cent stake in InterGen from AIG Highstar Capital II LP, a fund owned by American International group. The stake has given GMR access to InterGen's 12 operating power plants in the UK, the Netherlands, Mexico, Australia and the Philippines, with annual sales of $1.65 billion.
This acquisition is expected to provide GMR a platform to expand in InterGen's footprint in new regions. InterGen has a gross capacity of 12,766 mw, including 4,680 mw under development.
Earlier this month, GMR raised Rs 500 crore by issuing non-convertible debentures to ICICI Bank to finance its infrastructure projects.
It is also in talks with private equity companies such as Singapore-based Temasek Holdings for investments of more than Rs 1,000 crore to finance its expansion programme. However, the company refused to comment on private equity participation.
GMR Energy, a group company, has plans to invest up to Rs 18,000 crore in the next three years to generate about 3,300 mw from its present capacity of around 800 mw. To finance this expansion, the company is eyeing corporate debt and private equity funds in addition to bank loans.
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