Kathmandu, May 10
The parent company of the Indian firm developing the 900 MW Upper Karnali project in Nepal has decided to sell 30 percent stake in its subsidiary to a Malaysian power company.
According to reports, GMR Infrastructure is selling a 30 per cent equity stake in its subsidiary GMR Energy Ltd (GEL) to Malaysia’s Tenaga Nasional Berhad for IRs 20 billion.
GMR Energy’s subsidiary GMR Upper Karnali Hydropower Ltd signed a project development agreement with Nepal in 2014. According to officials, the company was expected to manage funds for the project within two years, but it has been unable to do so because of its own financial position.
Local reports said that in a teleconference organised on Monday to announce the equity dilution, GMR Corporate Chairman Kiran Kumar Grandhi said the firm would use the proceeds to retire GEL’s debt. After the funding infusion, the energy arm’s debt will come down to IRS 7.5 billion, he said, resulting in a saving of Rs 2.5 billion a year in interest payments.
GMR Infrastructure’s total debt stands at IRS 434 billion. In addition to the funds infusion into GMR Energy, the Malaysian firm will bring in its expertise in generation, distribution and in the infrastructure sector, says GEL.
