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Investor Presentation
March 2017
1
DISCLAIMER
All statements, graphics, data, tables, charts, logos, names, figures and all other
information (“Contents”) contained in this document (“Material”) is prepared by GMR
Infrastructure Limited (“Company”) soley for the purpose of this Material and not
otherwise. This Material is prepared as on the date mentioned herein which is solely
intended for reporting the developments of the Company to the investors of equity
shares in the Company as on such date, the Contents of which are subject to
change without any prior notice. The Material is based upon information that we
consider reliable, but we do not represent that it is accurate or complete.
Neither the Company, its subsidiaries and associate companies (“GMR Group”), nor
any director, member, manager, officer, advisor, auditor and other persons
(“Representatives”) of the Company or the GMR Group provide any representation
or warranties as to the correctness, accuracy or completeness of the Contents and
this Material. It is not the intention of the Company to provide a complete or
comprehensive analysis or prospects of the financial or other information within the
Contents and no reliance should be placed on the fairness on the same as this
Material has not been independently verified by any person.
NONE OF THE COMPANY, THE GMR GROUP AND THE REPRESENTATIVES
OF THE COMPANY AND THE GMR GROUP ACCEPT ANY LIABILITY
WHATSOEVER FROM ANY LOSS OR DAMAGE HOWSOEVER ARISING FROM
ANY CONTENTS OR OTHERWISE ARISING OUT OF OR IN CONNECTION
WITH THIS MATERIAL.
This Material is published and available on the Company’s website
www.gmrgroup.in which is subject to the laws of India, and is soley for information
purposes only and should not be reproduced, retransmitted, republished, quoted or
distributed to any other person whether in whole or in part or for any other purpose
or otherwise.
Any reproduction, retransmission, republishing or distribution of this Material or the
Contents thereof in certain jurisdictions may be restricted by law and persons who
come into possession of this Material should observe such laws and restrictions if
any.
This Material and any discussions which follows may contain ‘forward looking
statements’ relating to the Company and the GMR Group and may include
statements relating to future results of operation, financial condition, business
prospects, plans and objectives, are based on the current beliefs, assumptions,
expectations, estimates, and projections of the directors and management of the
Company about the business, industry and markets in which the Company and the
GMR Group operates and such statements are not guarantees of future
performance, and are subject to known and unknown risks, uncertainties, and other
factors, some of which are beyond the Company’s or the GMR Group’s control and
difficult to predict, that could cause actual results, performance or achievements to
differ materially from those in the forward looking statements. Such statements are
not, and should not be construed, as a representation as to future performance or
achievements of the Company or the GMR Group. In particular, such statements
should not be regarded as a projection of future performance of the Company or the
GMR Group. It should be noted that the actual performance or achievements of the
Company and the GMR Group may vary significantly from such statements. All
forward-looking statements are not predictions and may be subject to change
without notice.
This Material is not and does not constitute any offer or invitation or
recommendation or advise to purchase, acquire or subscribe to shares and other
securities of the Company or the GMR Group and not part of this Material shall
neither form the basis of or part of any contract, commitment or investment decision
nor shall be relied upon as a basis for entering into any contract, commitment or
investment decision in relation thereto. Prospective investors in the Company or the
GMR Group should make its own investment decisions and seek professional
advice including from legal, tax or investment advisors before making an investment
decision in shares or other securities of the Company or the GMR Group.
Remember, investments are subject to risks including the risk of loss of the initial
principal amount invested; past performance is not indicative of future results.
REGULATORY AUTHORITIES IN THE UNITES STATES OF AMERICA, INDIA,
OR OTHER JURISDICTIONS, INCLUDING THE SECURITIES AND EXCHANGE
COMMISSION AND THE SECURITIES AND EXCHANGE BOARD OF INDIA
(“SEBI”), HAVE NEITHER APPROVED OR DISAPPROVED THIS MATERIAL OR
DETERMINED IF THIS MATERIAL IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY MAY CONSTITUTE A CRIMINAL
OFFENSE.
Institutional Framework
3
Visionary Leadership - Building Institution For Perpetuity…
THE GROUP HOLDING BOARD
GM Rao
Group Chairman
• Founder Chairman of the Group
• Since 1978, he has successfully led the GMR group
creating infrastructure assets of national importance
• Holds a degree in Mechanical Engineering
Srinivas
Bommidala
Chairman, Airports
• Held various managerial
positions in the GMR Group in
the past
• One of the first Directors of the
Group and Board Member since
1996
GBS Raju
Chairman, Energy
• Involved with the group since
1996
• Held various positions including
the group CFO in the past
• Instrumental in establishing the
roads business
G Kiran Kumar
Corporate
Chairman
& MD, GMR Infra
• Significant experience in leading
projects and businesses in the
infrastructure space
• Spearheaded the development
of the T3 terminal at Delhi
Airport
B V N Rao
Chairman, Urban
Infra & Highways
• Over 40 years of experience
• One of the founding Directors of
the Group in 1988
• Has been associated with all
the businesses promoted by the
group
P M Kumar
Chairman,
Institution
Building &
Governance
• Over 45 years of experience in
several leading and diverse
organizations in senior
leadership and consulting
positions
INDEPENDENT DIRECTORS ON BOARD OF GMR INFRASTRUCTURE
NC Sarabeswaran
• Ex- director of RBI
and ING Vysya
Bank
R S S L N
Bhaskarudu
• Ex- MD of Maruti
Udyog Limited
• Served more than
two decades at
BHEL
S Sandilya
• Chairman - Eicher
Motors
• Board member of
Parry’s Sugar
Industries & Mastek
S Rajagopal
• Ex-Chairman & MD
of Bank of India,
Indian Bank
C. R. Muralidharan
• Ex- ED of Bank of
Baroda
Kameswari Vissa
• CA with over 24
years of experience
comprising of
management
consultancy and
industry experience
4
Feature Of Our Governance is Group Performance Advisory Council
which Comprises Eminent Industry Leaders
Dr. Sumantran is Executive Vice-Chairman of Hinduja Automotive. From 2001-05, he was chief executive of TATA Motors
Car business. Prior to this he had a 16-year career stint with GM in Detroit Dr V Sumantran
Former Chairman Ingersoll Rand. Previously held leadership positions with Kirloskar group. He serves on the advisory and
statutory Board of various CompaniesDaljit Mirchandani
Founder / Co-founding member Indocean, CRISIL and HDFC. He has been in advisory roles to USAID, The World Bank
and The Asian Development Bank in the past Pradip P Shah
Previously held leadership positions in Wipro, ABB and HP. Member of several boards including Idea Cellular and ING
Vysya Bank Arun Thiagarajan
He has over 4 decades of banking experience and is a consultant for World Bank, IFC, etc. He has served as CEO of
Corporation Bank and Chairman of Vysya Bank K R Ramamoorthy
Retired IAS, with over 30 years experience in financial services and public sector enterprises. Served leadership positions
like Chairman SEBI (equivalent to SGX in S’pore, SEC in US), CMD IDBI Bank, Chairman UTIM Damodaran
A highly acclaimed business advisor, speaker, and author who has coached some of the world's most successful CEOs.
For 35 years, he's worked with companies like GE, Bank of America, DuPont, 3M,etc. Dr Ram Charan
5
We have approached Institution Building through
Technology, People and Governance
• Family Governance guided by
Family Constitution
• Management Assurance, Ethics,
Governance Council
• Group Performance Advisory
Council (GPAC)
• Business Excellence
• Strategy & Risk Management
• Corporate Centre of Excellence
for processes – Procurement, HR,
Legal
• Centralized infrastructure and
ERP with real-time intelligence
• Business automation with real-
time war rooms, toll monitoring,
video audits, laser mapping
• Process automation through ERP
and e-enabled shared services
organization for back-office
transactions
• Vision, Values & Beliefs
• Leadership Development and
talent Management
• Empowered Organization
Process & Governance 2 Technology 3
People 1
6
Sustainability Initiatives - Airports
• Awarded the prestigious Leadership in
Energy and Environmental Design New
Construction (LEED NC) SILVER rating by
US Green Building Council in Sep 2008
• Design leads to 25% saving in energy & 30%
in water
• First in Asia to be LEED certified for its eco -
friendly design
GMR Hyderabad International Airport
• T3 has been awarded the green building
“LEED INDIA GOLD” rating by IGB ( Indian
Green Building Council) in Feb 2011, thereby
making it one of the largest Green Buildings
in the world
• First Carbon Neutral Airport in Asia Pacific
region in Oct 2016, accredited by from
Airports Council International (ACI)
Delhi International Airport – T3 terminal
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Sustainability Initiatives - Energy
• All Operating Units are Integrated Management System certified (ISO 9001:QMS, ISO
14001:2004:Environmental Management System, OHSAS 18001)
• GMR Energy Corporate
o Achieved best ever FY16 LTIFR 0.122 in Indian Power Sector
o Publishing Corporate Sustainability Report since 2013 vetted by a Big 4 firm
o Adopted GRI G4 based SoFi – a Sustainability E-Tool, a product of M/s Thinkstep, Germany
• GMR Power Corporation Ltd., Chennai (200 MW)
o The GPCL Plant treats 7200 cubic metres of raw sewage per day from Chennai Metropolitan & Sewerage
Board to produce 5400 cubic metres of clean water for its own use
o The plant has received the renowned Dr. M.S. Swaminathan Award for Environmental Protection
Sustainable Features Aspects
Energy Efficient thermal power technology SUPER CRITICAL TECHNOLOGY
Renewable Energy SOLAR, WIND
Green Energy HYDRO ELECTRIC POWER
Cleaner Fuel technology NATURAL GAS
Addressing Global Issues SIX CDM PROJECTS
Overall, GMR Group will be reducing 4.59 Million Metric tons of CO2e/ annum through its CDM Projects
8
Committed to “Giving Back To The Community" through
GMR Varalakshmi Foundation
“To make sustainable impact on the human development of under-served
communities through initiatives in education, health and livelihoods”
Mission of
GMR Varalakshmi
Foundation
Our Four Pronged approachThrough
“Our Projects”
• GMRVF works with communitieswherever the Group has businessoperations
• 25 locations in India & 2 in Nepal
• One airports of GMR has beenrecognized as an example of“Reaching out to Bottam of Pyramid”in the National Voluntary Guidelinesfor Responsible Business publishedby Ministry of Corporate Affairs
Through
“Personal Philanthropy”
• Family Tradition of “Giving back to society”
• 1991 - Formal foundation activities started from Rajam (A.P) in South India
• Group Chairman (GM Rao) has pledged his entire individual shareholding in the Group to the Foundation
• Family Constitution ensures donation by the family members to the Foundation
GMR VaralakshmiFoundation
Education
Health, Hygiene & Sanitation
Community Development
Livelihood
Business Overview
10
GMR Group: Evolution And Key Milestones
Incorporation of
GMR
Infrastructure
Ltd (GIL)
Consolidation• Execution:
Operationalise under construction projects
• Focus on operational efficiency, returns & cash flow optimisation
• Liquidity management
• Recycling of capital through divestments
• Declared Investment holiday
Young Group – Less than 20 years old with a Balance Sheet of INR 672bn [USD 10.0bn]
• Chennai power plant started operations
• Two highways started operations
• Forayed into airports with award of Hyderabad airport concession
• Hyderabad airport startedoperations
• Delhi Airport (DIAL)concession awarded
• IPO successfully completed
• Raised ~USD 1 bn via QIP
• Acquired 50% stake inIntergen Power
• Ambala Chandigarh toll roadstarted operations
Growth Phase
• Focus on attaining scale and
rapid growth
• Bidding for new projects and
commencing construction
Managing
Turbulence
• Raising of
equity capital
• Focusing on
execution
Stablisation of Cash Flows
• All projects in Airport, Energy and Highway
sector fully operational
• No major investments required
• Assets stablisation would lead to positive
cash flows
USD 1 = INR 67
• Divested stake in Island Power,Istanbul Airport, GMR Jadcherla andGMR Ulundurpet
• Warora & Kamalanga power projectsstarted operation
• Road projects started operation:Hyderabad Vijayawada, HungundHospet and Chennai ORR
• Won concession to expand Cebuairport in Philippines
• Received favourable verdict (Jun’14)from arbitration tribunal regardingtermination of Male Airport
• Raised INR 14.8bn [USD 220mn] via QIP,INR 14bn [USD 209mn] via Rights Issue &USD 300mn via FCCB from KIA
• DIAL raised USD 289mn and USD 523mnvia international bond issues
• GMR Energy raised USD 300mn fromTenaga for a 30% stake
• Divested 2 Transmission assets and 3Highway projects
• Adopted SDR for gas basedRajahmundhry & coal based Chhattisgarhpower plants
• Won Mopa Airport, North Goa in Aug’16
• Terminal 3 of DIAL completed inrecord 37 months
• Coal mines in Indonesia acquired
• Sabiha Gokcen (Istanbul airport)inaugurated
• Raised ~USD 315 mn via QIP
• PE Investors invest US$300mn inGMR Energy and US$330mn in GMRAirports
• Stake in Intergen Power divested forUSD 1.2 bn
• 5 power plants and 3 road projectsbecame operational
11
Business Overview
AIRPORTS
~95 mn Passenger Capacity• 2 Airports in Delhi and Hyderabad
• 1 Airport in Mopa, North Goa (recently awarded)
• 1 Airport in Philippines : Mactan - Cebu Airport
• Airport Land : 230 acres in Delhi, 1,500 acres in Hyderabad, 232 acres in Goa
ENERGY
~7,000 MW Power Generation Capacity• 3,350 MW of Coal Based Projects
• 1,400 MW of Gas Based Projects
• 180 MW of Hydro Projects – under construction
• 1,800 MW of Hydro Projects – under development
• 25 MW of Solar Project / 3.4 MW of Wind Power Projects
• 4 Coal Mines – 2 each in India and Indonesia
HIGHWAYS
7 Operational Projects• 4 Annuity Projects – 285 kms
• 3 Toll Projects – 315 kms
URBAN INFRASTRUCTURE
~13,800 Acres Land• 10,500 acres in Kakinada & 3,300 acres in Krishnagiri
12
Corporate Structure
Promoter & Promoter Group
61.7%
FIIs 19.5%
MF & DIIs 7.9%
Others 10.9%
Shareholding
as on Dec 31,
2016
* Includes both direct & indirect holding ** Share Purchase Agreement signed to divest 51% stake; already transferred 15% in Mar’16
97% 52%* 100%
GMR Infrastructure Ltd
100%*
Operational Projects Stake Operational Projects Stake Operational Projects Stake Annuity Projects Stake Projects Stake
Warora Plant (Coal) 100% Chhattisgarh Plant (Coal) 48% Tuni Anakapalli 100% Kakinada SIR 51%
Kamalanga Plant (Coal) 87% Rajahmundry Plant (Gas) 45% Tambaram Tindivanam 100% Krishnagiri SIR 100%
Kakinada Plant (Gas) 100% Chennai Plant (Diesel) 51% Pochanpalli 100%
Vemagiri Plant (Gas) 100% Wind Projects 100% Chennai ORR 90%
Solar Power Project 100%
Bajoli Holi Project 100% Ambala Chandigarh 100%
Alaknanda Project 100% Hyderabad Vijaywada 90%
Upper Karnali Project 73% Hungund Hospet ** 36%
Upper Marsyangdi Project 82%
64%
Hyderabad
International Airport63%
Mactan-Cebu
International Airport40%
Mopa Airport, North
Goa100%
PT Barasentosa Lestari
(PT BSL)
PT Golden Energy Mines
(PT GEMS)
Special Investment Region
BOT (toll) Projects
GMR Highways Ltd
100%
30%
Under Construction / Development (Hydro)
Other Energy Assets
Under Development Project
GMR Airports Ltd GMR Energy
Coal Mines (Indonesia)
Delhi International
Airport
Airport Sector
14
GMR Airports: Assets
World class emerging markets airports
• World class airports - Aggregate capacity of ~95 mn passengers (Delhi, Hyderabad, North Goa and Cebu, Philippines)
• Emerging market focus - 3 Airports in India and 1 in Philippines
• Diversification of revenue streams - Besides revenue from aero related activities, airports also get revenue from non-aero activities such as cargo
handling, MRO, Duty Free, F&B, IT & Car Parking and also from Real Estate (CPD) at airport
Delhi
Hyderabad
Philippines
Mactan Cebu International
Airport
Shareholders
GMR 40%Megawide 60%
Second Busiest Airport in
Philippines
Delhi International Airport
Shareholders
GMR 64%AAI 26%Fraport 10%
India’s Largest and
Busiest Airport
Hyderabad International
Airport
Shareholders
GMR 63%GoAP 13%AAI 13%
MAHB 11%
India’s First Greenfield Airport
Mopa Airport
Second Airport in Goa
Shareholders
GMR 100%
15
Airport Asset Details
Project Delhi International Airport
(DIAL)
Hyderabad International
Airport (GHIAL)
Mopa Airport
North Goa
Mactan - Cebu International
Airport (MCIA)
Status Operational OperationalAwarded in
August 2016
Operational and undergoing
expansion
Annual Passenger
Capacity62 mn 12 mn ~7 mn ** 16 mn #
Concession Terms• 30 + 30 years concession
(starting April 2006)
• 46% revenue sharing
• 30 + 30 years concession
(starting March 2008)
• 4% revenue share
• 40 years + 20 years
(starting November 2016)
• 37% revenue sharing
• 25 years (from O&M start
date)
• Upfront fees of USD 320mn +
VAT
• Project cost of USD 750mn
Commercial
Property
Development
• 230 acres Real Estate parcel
• 1st Phase development of 45
acres is completed
• 2nd Phase of 23 acres
awarded to Bharti Realty
• 1,500 acres Real Estate
parcel
• ~100 acres already
monetised
• 232 acres Real Estate parcel
Revenue Structure• Assured “Target Aero Revenue” every year, based on variables like approved project cost, WACC,
normative operations, etc.• Aero revenue based on pre-
determined PSF
Traffic – 9MFY1742.6 mn Pax;
311,446 ATMs*
11.2 mn Pax;
96,316 ATMs*N.A.
6.7 mn Pax;
54,148 ATMs*
Traffic – FY1648.4 mn Pax;
365,696 ATMs*
12.5 mn Pax;
106,303 ATMs*N.A.
8.0 mn Pax;
64,900 ATMs*
*ATM = Air Traffic Movement
# Post 1st phase of expansion
** Post completion of Phase 1
16
Airports: Cash Flows to Improve
DIAL’s tariff fixation assumptions (by AERA) under appeal
• Appealed for cost of equity of 24% vis-à-vis currently
approved rate of 16% by AERA
• Appealed for return of 24% on real estate deposits
(utilized to fund capex) vis-à-vis Nil return approved
by AERA
Long awaited regulatory approvals to improve the profitability matrix
Note : Current tariff will continue till the final order of Tribunal
UDF collection started post DGCA notification restoring the
collection of Airport Charges with effect from 05 Nov’15
GHIAL has submitted its tariff proposal for second control
period starting 01 April 2016
Delhi Airport Hyderabad Airport
• Delhi Airport raised ~USD 812 mn through two landmark issuance of International bonds
o In Jan’15, raised ~US$ 289 mn at 6.125% for 7 years
o In Oct’16, raised ~US$ 523 mn at 6.125% for 10 years. The transaction was the first 10-year High Yield USD bond transaction from an
India incorporated Issuer in the 144A / Reg S format
• Proceeds from bond issuances used to entirely refinance the outstanding Rupee Term Loan and External Commercial Borrowings
o Resulted into a benefit of (a) lower interest cost and (b) bullet repayment instead of yearly repayments
Delhi Airport - Refinancing existing debt to realign cash flows to repayment
17
DIAL Land Monetisation to unlock Higher Potential Returns
• Awarded development rights for 45 acres through competitive
bidding
− Developable area of 6.12 msf
• Operations commenced for JW Marriott, Lemon Tree, Red Fox,
Holiday Inn, Ibis Hotel, Novotel and Pullman
− ~2,400 rooms are operational with an occupancy of ~75%
Total Land Parcel – 230 acres
Flexibility in land usage – allows all commercial activities except residential
230 acres of Aerotropolis Development Aerotropolis Phase - I : 45 Acres of Hospitality District
• Commercial development at airport envisages
development of an alternate commercial hub, right in the
heart of NCR
• Location lends dual advantage of central location with
effective connectivity & proximity to demand
• Awarded development rights for ~23 acres to Bharti Realty
Holdings Ltd
− Bharti to develop an ‘Integrated Retail Development Project’
− Developable area of ~2.1 msf
− Upfront payment of INR 3,150 mn (including RSD, ADC, Bid
Processing Fee)
− Will receive License Fee equivalent to 20% of Revenues with
Minimum Guaranteed Payments
Aerotropolis Phase - II : 23 Acres of Retail District
Hospitality District
(45 acres)
Destination Retail
(23 acres)
Balance Land
(162 acres)
Energy Sector
19
PT Barasentosa
Lestari, Indonesia
(404 MT)
Bajoli Holi
(180 MW / Hydro)
Alaknanda
(300 MW / Hydro)
Upper Marsyangdi
(600 MW / Hydro)
Upper Karnali
(900 MW / Hydro)
Chhattisgarh
(1,370 MW / Coal)
Warora
(600 MW / Coal) Kakinada
(235 MW / Gas)
Chennai
(200 MW / Diesel)
Rajahmundry
(768 MW / Gas)
Kamalanga
(1,050 MW / Coal)
Vemagiri
(388 MW / Gas)
Solar Plant
(25 MW)
PT GEMS, Indonesia
(1.8 BT)
4,639 MW in operation and 2,330 MW under implementation
6,969 MW
Capacity by stage Fuel based capacity
6,969 MW
Energy Assets
Kamalanga
(350 MW / Coal)
Operational Assets
Projects Under Construction
Projects Under Development
Legends:
Coal Mines
Operational4,639 67%
Under construction
180 3%
Under development
2,150 31%
Coal3,370 48%
Hydro1,980 28%
Natural Gas1,391 20%
Others228 3%
20
Revised Structure of GMR Energy
GMR Infrastructure
Ltd
GMR Energy Ltd
Kamalanga Power Plant
(Coal - 1,400MW) **
Warora Power Plant
(Coal - 600MW)
Kakinada Power Plant
(Gas - 235MW)
Gujarat Power
(Solar - 25MW)
Bajoli Holi Project (Hydro
- 180MW)
Upper Karnali Project
(Hydro - 900MW)
Upper Marsyagadi
Project (Hydro - 600MW)
Alaknanda Project
(Hydro - 300MW)
Thermal
(Coal & Gas)Renewable
(Hydro & Solar)
Chhattisgarh Power Plant
(Coal – 1370MW)
Rajahmundry Power
Plant (Gas – 768MW)
Other Assets
Other Power
Assets
Coal mines -
Indonesia
Excluded Assets
Tenaga Nasional
Berhad
Private Equity
Investors
52%*
18%30%
* Includes both direct & indirect holding
** Kamalanga Power Plant includes 350MW of Unit 4 which is under development
Operational Under Construction Under Development
Vemagiri Power Plant
(Gas - 388MW)
21
Overview• Primary investment of $300m (~INR 20bn) by Tenaga Nasional Berhad in GMR Energy (GEL) for 30% stake
on a fully diluted basis
Structure
• Portfolio includes
o Operational projects of 2,300 MW and
o Development pipeline of 2,330 MW
• Tenaga has right to invest in Chhattisgarh and Rajahmundhry projects at the Fair Market Value (FMV) any time
within the next 5 year (subject to RBI guidelines)
• Indonesian coal mines is outside of GEL since Tenaga does not want to take exposure in commodities
GEL Valuation • Equity Value of USD 1 bn (~INR 67bn)
Key Terms &
Conditions
• Proceeds from the transaction is used to reduce corporate debt
• All convertible instruments (Private Equity players) have been converted into equity shares
• GMR remains the majority shareholder
Strategic Partnership with Tenaga Nasional Berhad
USD 1 = INR 67
22
Partnership with Tenaga provides renewed impetus to Energy Business
• Partnership between one of the largest integrated utilities and an established player in the Indian Powersector will be a force multiplier to create one of the most valuable companies
Strong synergies from the strategic partnership with Tenaga
• GEL has over 80% of its capacity contracted under long-term PPAs ensuring high visibility of cash flows
Strong Visibility on Cash Flows from Operational Portfolio
• Primary capital infusion strengthens GEL’s balance sheet through reduction of corporate debt
• Convertible preference shares issued to Private Equity Investors converted into Equity
Strengthening of the Balance Sheet
• Given the attractiveness of GMR Energy post the investment, it will have an opportunity to unlock value at anappropriate time
Attractiveness of GMR Energy from a value unlocking perspective
23
GMR Energy - Thermal Power Projects
Project Warora
(Maharashtra)
Kamalanga
(Orissa)
Vemagiri
(Andhra Pradesh)
Kakinada – Barge Plant
(Andhra Pradesh)
Fuel Coal Coal Gas Gas
Ownership 100% 86% 100% 100%
Capacity 600 MW 1,050 MW 388 MW 235 MW
Project Cost INR 40 bn [USD 597 mn] INR 65 bn [USD 970 mn] INR 11.5 bn [USD 171 mn] INR 6 bn [USD 90 mn]
CoD September 2013 March 2014 January 2008 June 2010
Power Off-
take• Fully contracted long term
PPA’s
• 85% of power contracted through
long term PPA
• Plan to tie-up the remaining also
through a long term PPA
• 100% Regulated Tariff
• 23 years long term PPA (starting
Sept’06) with four state owned
discoms in Andhra Pradesh
• 100% Merchant Tariff
Fuel Linkage• Confirmed linkage from Coal
India Ltd.• Confirmed linkage from Coal
India Ltd.
• Gas allocation from KG Basin
(not getting gas since 2012-13)
• Plant restarted post tie-up of gas
supply through the RLNG
scheme
• Gas allocation from KG Basin
(not getting gas since 2012-13)
PLF• PLF of 67% in 9MFY17
• PLF of ~76% in FY16
• PLF of 67% in 9MFY17
• PLF of ~67% in FY16
• Plant operated at 59% PLF till
FY’12
• PLF in FY16 stood at ~18%
• PLF of 12% in 9MFY17
• Plant operated at 57% PLF till
FY’12
Refinancing
• Refinancing of project loan
completed
• Interest rate reduced by 110bps,
moratorium of 18 months and 15
years repayment period
• Refinancing of the project loan
completed
• Interest rate reduced by 100bps,
moratorium of 30 months with
16.5 years repayment period
USD 1 = INR 67
24
GMR Energy – Pipeline of Hydro Power Projects
ProjectBajoli Holi
(Himachal Pradesh)
Alaknanda,
(Uttaranchal)
Upper Karnali
(Nepal)
Upper Marsyangdi
(Nepal)
Ownership 100% 100% 73% 82%
Capacity 180 MW 300 MW 900 MW 600 MW
Concession Period
• 40 years from CoD
• Royalty power to government:
Year 1-12: 12%; Year 13-30: 18%;
Year > 30: 30%
• 45 years from Implementation
Agreement
• 30 years from generation license
• 12% free power to NEA1
• Free equity of 27% to Govt. of
Nepal
• 30 years from generation license
Expected COD • FY19 • FY21 • FY20
Current Status
• Financial Closure achieved in April
2013
• Lenders of the project are IDBI
Bank and L&T Infra Finance
• NTP issued to Gammon for civil
works
• Currently, ~40% of project is
completed
• DPR2 approved by CEA3
• Environmental Clearance obtained
• Land fully acquired
• Registered as CDM5 Project with
UNFCC9
• Approval from Govt. of Nepal
obtained for capacity enhancement
• Survey license received
• CDM5 application under progress
• PDA6 signed with Govt. of Nepal
• Received consent letter from MEA
for import of power from Nepal
• JDA7 with IFC8
• Approval from Govt. of Nepal
obtained for capacity enhancement
• Survey license received
• CDM application under progress
• PDA under negotiation with Govt.
of Nepal
Overview
• Under Construction
• Run of the river power facility
• Total Project Cost of INR 22bn
[USD 329mn]
• INR 1.2bn [ USD 17.9mn] premium
paid to the Govt
• Under Development
• Run of the river power facility
• To give 13% of power generated
per annum to the state govt
• Project currently on hold, due to a
stay order for all such similar
projects in the region
• Under Development
• Run of the river power facility
• Entire power generated, net of free
power, if any, to be supplied to the
Government of Nepal, will be
exported to India
• Under Development
• Run of the river power facility
• On a build – operate – own –
transfer basis
• Expected to provide 12% of power
to Nepal government, and the rest
to be exported to India
Notes: 1. NEA: Nepal Electricity Authority; 2. DPR: Detailed Project Report; 3. CEA: Central Electricity Authority; 4. MoEF: Ministry of Environment and Forests. 5. CDM: Clean Development Mechanism;
6. PDA: Project Development Agreement. 7. JDA: Joint Development Agreement 8. IFC: International Finance Corporation; 9. UNFCCC: United Nations Framework Convection on Climate Change
USD 1 = INR 67
25
Other Energy Projects
Project Raikheda
(Chhattisgarh)
Rajahmundry
(Andhra Pradesh)
Fuel Coal Gas
Ownership 48% 45%
Capacity 1,370 MW 768 MW
Project Cost INR 124 bn [USD 1,855 mn] INR 49.4 bn [USD 737 mn]
CoD• November 2015 (Unit - 1)
• March 2016 (Unit – 2)• October 2015
Power Off-take
• Long term PPA with Chhattisgarh TransCo for 5% of gross
capacity
• Emerged as one of the lowest bidders for 500MW for long
term PPA to state of UP
• Signed short term PPA based on supply of gas through the
RLNG scheme
• To enter into long term PPA based on sustainable gas supply
Fuel Linkage
• Won the operational Talabira coal mine and Ganeshpur coal
mine
• Coal mining at Talabira started from Aug’15
• Currently no long term gas supply contract in place
• In the interim period, secured gas supply under e-bid RLNG
scheme from Oct’15 to Sept’16
PLF • PLF of ~26% in FY16 • PLF in FY16 stood at 20%
Others
• Adopted “Strategic Debt Restructuring” Plan considering
the absence of long term Power Purchase Agreements
o Out of total debt (incl. accrued interest) of INR 88 bn, debt
to the extent of INR 30 bn has been converted into equity
o Consortium lenders would have 52% shareholding
• Adopted “Strategic Debt Restructuring” Plan considering
the absence of long term Fuel Supply Agreement and long
term Power Purchase Agreements
• Refinancing of residual project loan under RBI’s 5/25 scheme
completed
o Extended repayment period of 20.5 years (moratorium of
1.75 years) and interest rate reduced to 10.75% p.a.
USD 1 = INR 67
26
Coal Mines
Project Talabira mine Ganeshpur mine
Mine Location Sambalpur, Odisha Latehar, Jharkhand
Prior Allottee Hindalco Industries Tata Steel Limited & Adhunik Group
Upfront payment INR 540 mn [USD 8.1 mn] INR 1,090 mn [USD 16.2 mn]
Geological Reserve - 138 Mn Tons
Extractable Reserve 9 Mn Tons 92 Mn Tons
Mining Plan 3 Mn Tons p.a. 4 Mn Tons p.a.
Bid Price INR 478 /ton INR 704 /ton
Coal Quality Grade ‘F’ (3,600 kcal) Grade ‘G 11’ (4,200 kcal)
Strip Ratio 1.02x 1.39x
Distance from plant 296 kms 740 kms
Current Status Operational mine; Mining commenced from Aug’15Under development stage
Would take 2-3 years to become operational
Project GEMS PTBSL
Mine Location Indonesia Indonesia
Ownership 30% 100%
Resources 1.77 Bn Tons 404 Mn Tons
Reserves 640 Mn Tons 142 Mn Tons
USD 1 = INR 67
Highway Sector
28
All 7 Projects (600 kms) are Operational
4 Projects (285 kms) are Annuity based and 3 Projects (315 kms) are Toll based
Hyderabad
Highways Projects
Chandigarh-Ambala Highway –
GACEPL (35 kms)
Tambaram-Tindivanam Highway –
GTTEPL (93 kms)
Tuni-Anakapalli Highway –
GTAEPL (59 kms)
Hyderabad-Vijaywada Highway –
GHVEPL (181 kms)
Adloor-Gundla Pochanpalli Highway –
GPEPL (103 kms)
Chennai Outer Ring –
GCORRP (30 kms)
Hungund-Hospet Highway –
GOHHHPL (99 kms)
29
Key Highlights
• Signed a Share Purchase Agreement to divest entire 51% equity stake in the Hungund Hospet project
o 15% stake has been transferred to Joint Venture partner; balance stake to be transferred post receiving all approvals
o Divestment has reduced INR 10.8 bn of debt and would create INR 850mn of liquidity
• Divested remaining 26% equity stake in GMR Ulundurpet and GMR Jadcherla projects during FY2016-17
o Stake transferred post receipt of all approvals
o Divestment created a liquidity of ~INR 1,045mn
Divestment of Road Projects in line with Asset Light, Asset Right Strategy
Highways Projects
Project NameAnnuity Based Road Projects (285 kms) Toll Based Road Projects (315 kms)
GTAEPL TTTEPL GPEPL GCORRPL GACEPL GHVEPL GOHHPL
Location Tuni-AnakapalliTambaram-
TindivanamPochampalli Chennai ORR
Ambala-
Chandigarh
Hyderabad-
Vijayawada
Hungund-
Hospet
Shareholding 100% 100% 100% 90% 100% 90% 36%
Road Length (kms) 59 93 103 30 35 181 99
CoD Dec-04 Oct-04 Mar-09 Jun-13 Nov-08 Dec-12Nov-12*/May -
14
Concession Period17.5 yrs from
May-02
17.5 yrs from
May-02
20 Yrs from
Sep-0620 Yrs from Jun-10
20 Yrs from
May-06
25 Yrs from Apr-
10
19 Yrs from
Sep-10
Summing Up
31
Key Highlights – Over Last ~ 2 Years
Particulars
‘Asset Light
Asset Right’
Approach
• Focus moved from Asset Growth to Cash Growth
• Delivered on ‘Asset Light, Asset Right’ strategy
Divestments • Divested 8 large projects:
o 1 Airport: Sabiha Gocken International Airport (SGIA), Turkey
o 1 Power project: Island Power Project, Singapore
o 1 Coal Mine: Eloff & Kendall Mines by Homeland Energy Group
o 3 Road projects: Jadcherla Expressway, Ulunderpet Expressway and Hungund Hospet Expressway
o 2 Transmission assets : Maru and Aravali
• Released INR 41 bn [USD 616 mn] equity and reduced liabilities by INR 76 bn [USD 1.13 bn] through
divestments
Capital Raising • Total Equity & Equity-linked Capital Raised - INR 70 bn [USD 1.04 bn]
• Raised INR 48.8 bn [USD 728 mn] over the last ~2 years
o QIP of INR 14.8 bn [~USD 220 mn]
o Rights Issue of INR 14.0 bn [~USD 209 mn]
o FCCB of INR 20.0 bn [USD 300 mn]
• Investment of USD 300 mn by Tenaga for a 30% stake in GMR Energy Ltd
• Issuance of International Bonds:
o USD 289 mn for Delhi International Airport at 6.125% for 7 years (Jan 2015)
o USD 523 mn for Delhi International Airport at 6.125% for 10 years (Oct 2016)
USD 1 = INR 67
32
Key Highlights - Over Last ~ 2 Years (cont.)
Business
VerticalsUpdate
Energy • GMR Energy Ltd. - Renegotiation completed with Private Equity Investors; issued 18% stake
• Warora & Kamalanga - Both plants operating at high PLFs
o Orissa PPA (Kamalanga) - Awarded a tariff increase of INR 0.65/unit to INR 3.4/unit
o Haryana PPA (Kamalanga) – Awarded favourable order w.r.t. ‘change in law’ and ‘coal cost pass-through’
o MSEDCL & DnH PPA (Warora) - Awarded favourable order w.r.t. ‘change in law’ leading to an increase in the tariffs by
~INR 0.39/unit and ~INR 0.31/unit respectively
o Tamil Nadu PPA (Warora) - Commenced full supply of 150 MW from Dec’15 onwards
• Gas Auctions (RLNG scheme) - GMR won right to receive imported R-LNG for two of it’s power projects
(Vemagiri & Rajahmundhry)
o Both Vemagiri & Rajahmundhry started operations during FY16 post winning gas supply
• Strategic Debt Restructuring
o Rajahmundhry (Gas - 768 MW) – Converted INR 14.1 bn of debt into equity & issued shares to consortium lenders
representing 55% stake in the project
o Chhattisgarh (Coal - 1,370 MW) – Converted INR 29.9 bn of debt into equity & issued shares to consortium lenders
representing 52% stake in the project
• Refinancing of Operational projects - Group is refinancing the project debt to align the cash flows with
repayment schedule. Already debt of Warora, Kamalanga & Rajahmundhry projects has been refinanced
• Divestment of Transmission projects - Sold 74% stake in Maru project and 49% stake in Aravali project to
Adani Transmission Limited (ATL) for a consideration of INR 1 bn
33
Key Highlights - Over Last ~ 2 Years (cont.)
Business
VerticalsUpdate
Airport • Delhi Airport (DIAL) - Raised USD 289 mn & USD 523 mn through an international bond issues
• DIAL Real Estate – Awarded development rights of 23 acres (~2.1 msf) for retail district to Bharti Realty
• Hyderabad Airport – Restarted collection of User Development Fee (UDF) under ‘Hybrid Till’ methodology of
tariff determination; Submitted tariff proposal for second control period with AERA
• Mopa Airport, North Goa – GMR won right to develop & operate the Greenfield Airport in Mopa
• Mactan Cebu Airport, Philippines – Construction ongoing for expanding capacity to 16 mn pax in Phase 1
• Maldives Airport - Awarded compensation of ~USD 270 mn by the international Arbitral Tribunal; Compensation
covers (a) debt, (b) equity with return of 17% & (c) termination payments & legal costs
Highways • Hungud Hospet project – Signed Share Purchase Agreement to divest 51% stake at a P/BV of 1.1x;
transferred 15% stake in Mar’16
• Tindivanam Ulundurpet project – Divested balance 26% stake to India Infrastructure Fund (IIF)
• Faruknagar Jadcherla project – Divested balance 26% equity stake
Urban Infra &
EPC• Kakinada SIR signed an MoU for 2,700 acres including that with GAIL, HPCL and Govt. of Andhra Pradesh
together to set up a cracker unit with a proposed investment of INR 400 bn [USD 6 bn] in 2,000 acres of land
• GIL led consortium has won two packages of Eastern Dedicated Freight Corridor (DFCC) project worth
INR 51 bn [~USD 758 mn]
• In Jun’16, GIL led consortium won two more packages on the Eastern DFCC worth INR 23 bn [USD 340 mn]
USD 1 = INR 67
34
Net Debt-to-EBITDA Ratio (x)
24.825.9 25.5
42.6
FY13 FY14 FY15 FY16
82.686.4 88.9
109.5
FY13 FY14 FY15 FY16
Net Revenue (INR bn) Gross & Net Debt (INR bn) *
Key Financial Indicators (Consolidated)
EBITDA (INR bn) Interest Coverage Ratio (x)Sector wise Debt breakup *
468.9
67.7
401.2
Gross Debt Cash &equivalents
Net Debt
Airport22%
Energy52%
Roads7%
Others5%
Corporate14%
13.6
14.615.5
9.4
FY13 FY14 FY15 FY16
1.2
0.9
0.7
1.1
FY13 FY14 FY15 FY16
* As on 31 March 2016
35
• Consolidate existing Energy & Highways projects
• Capex holiday in Energy & Highway projects
• Explore select profitable opportunities in the Airport sector
• Improvement in Operational Efficiencies across various projects and cost optimization
• Focus on consolidation and strengthening of balance sheet through deleveraging
• Continuous reduction of Corporate Debt
o Capital raising through IPO of Airport Assets
o Induction of strategic / financial partner in Airport holding company
o Divestment of certain operational Energy / Highway projects
o Recovery of receivables from Energy Distribution companies, Airlines etc
• Refinancing of project debt through capital market (Bonds) / bank refinancing route to result into
o Reduction of interest rate,
o Projects getting longer moratorium and
o Extending maturity of debt primarily to align the repayment schedule with the Cash Flows of the project
Focus for next 12- 18 Months
Focus on stronger Balance Sheet through financial innovation & better project performance
Business Strategy
Financial Initiatives to Strengthen the Balance Sheet
36
Summing Up – Strengths of GMR
Capex phase complete; entered cash flow generation phase
Diversity across business segments – To ensure stability of cash flows
Continued focus on asset monetisation post value creation - Released INR 41 bn [USD 616 mn] equity and reduced
liabilities by INR 76 bn [USD 1.13 bn] through divestments over last ~2 years
Delivered world class assets in record time like Delhi and Hyderabad airport - Received various awards & recognitions
Strong track record of raising capital - Total Capital Raised of INR 85 bn [USD 1.27 bn] since FY’12 (excl. divestments)
Experienced Leadership and Management teams duly guided by the Group Performance Advisory Council
Government’s renewed focus on infrastructure and resolution of impediments to provide boost to GMR
Thank You
For further information, please visit
Website: www.gmrgroup.in or
Contact: [email protected]