GMR Energy sells stake to Adani Transmission

GMR Energy Limited (GEL) has entered into definitive agreements with Adani Transmission Limited (ATL) to sell its 74% stake in Maru Transmission Services Limited (MTSL) and 49% stake in Aravali Transmission Services Limited (ATSL). Currently the stakes in MTSL and in ATSL shall be transferred to ATL with an option to acquire the balance stakes in both the projects.

The equity consideration ascribed for the transaction involving both the projects is Rs 100 Cr. The total value realizable for GEL could be Rs 220 Cr considering this equity consideration and the expected upside of upto Rs 120 Cr from regulatory proceeds of various appeals of the assets before the APTEL.

After the completion of the above transaction, the combined debt of GMR Group would be reduced. The total debt in the projects as on March 31, 2016 is ~Rs 324 cr.

MTSL operates 270 Km of 400 KV / 220 KV transmission lines in Rajasthan. The Project had achieved COD in 2013. While, ATSL operates 96 Km of 400 KV transmission line in Rajasthan. The Project had achieved COD in 2014. The company in a statement said all the three distribution companies of Rajasthan (Discoms) are the beneficiaries of the transmission services being provided by these Transmission SPVs.

Both the projects were awarded through a tariff based competitive bidding process with license period of 25 years, further extendable by 10 years.

Speaking on the stake sale, GBS Raju, Business Chairman – Energy, GMR Group said “GMR Group continues on its path of Asset Light Asset right strategy. The deal will release further liquidity and deleverage the GMR balance sheet. The asset sale done at challenging market environment further signifies GMR’s ability to create value for its stake holders.”

“Adani Transmission Ltd. is foreseeing significant growth in the Transmission sector and expects to maintain its leadership position in the country. This acquisition is in sync with the long term strategy of ATL wherein, we are always looking to create value for our stakeholders,” said Adani Group chairman Gautam Adani.