Leading global investment firm KKR & Co. today said that it has agreed to provide Rs1,000 crores of structured long-term financing, with co-investors, to infrastructure development company GMR Holdings, the holding company for the GMR Infrastructure. GMR Group has interests in the airport, energy, highway and urban infrastructure sectors.
The transaction is subject to customary transaction documentation. Further terms of the transaction have not been disclosed.
The fund raise from KKR comes at a time when GMR is also planning a rights issue. In a filing today, the company said it plans to raise Rs1,500 crore through a rights issue and that its board has approved of the move.
GMR Holdings will infuse funds in GMR Infrastructure in the form of equity capital. This will help GMR Infrastructure to further strengthen its balance sheet, support the funding requirement for projects and meet its financing obligations.
“The rights issue, after successful conclusion, will improve the net worth of GIL and bring down the net debt-to-equity ratio to around 2.85 as against 3.50 prevailing as of March 2014. In addition, it will reduce the corporate debt of GIL,” said Grandhi Kiran Kumar, group director, GMR Holdings, in a statement.
In India, KKR provides structured financing solutions through multiple capital pools, including a non-banking finance company, alternative investment funds and special situations capital pools. The firm looks to provide flexible, long-term capital which can help companies achieve their objectives of balance sheet consolidation, deleveraging and long-term growth. KKR has executed more than $2 billion of structured financing to 21 business groups in India through its credit and capital markets business over the past five years.
“GMR represents a significant opportunity for KKR to partner with committed infrastructure groups which have developed world-class, highly relevant assets to build India,” said BV Krishnan, managing director, KKR Capital Markets, said.