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Gayatri Projects’ PE Deals, Rights Issue Delayed

22 August, 2011

Gayatri Projects expects stake sale to private equity players in two of its units to raise about $250 million to get delayed to up to December as the market conditions are not conducive now and funds are not immediately required, a senior company official said on Monday.

“It is going to take some more time. Hopefully, I think, before December we will have some concrete fund raising plan,” its Managing Director T.V. Sandeep Reddy told Reuters in an interview.

The company is looking at PE funding for units Gayatri Infra Ventures which is into road projects and Gayatri Energy Ventures which specialises in power projects.

Reddy didn’t give further details of the stake sale.

Gayatri Projects is awaiting approvals from the capital markets regulator Securities & Exchange Board of India for a rights issue, and expects it “any moment”, he said.

Reddy was expecting to close PE deals by June-August and raise funds via rights issue by end of June.

“The pricing and issue size will depend on the financial situation. It is too early…,” he added.

India has recorded 89 private equity deals worth $4.2 billion so far this year, according to Thomson Reuters data. As the equity markets have tumbled down, promoters are preferring more and more private equity deals as the options for fund raising becomes limited.

MAINTAINS GUIDANCE

The Hyderabad-based firm is expecting to maintain its revenue guidance of 18-20 billion rupees for FY12, he said.

The company, which has an order book of about 85 billion rupees now, was expecting to win orders worth 50 billion rupees in FY12.

The company is getting coal linkages from western corporate for its 1260-MW power project in Maharashtra, while acquisition of land and getting environment clearance is delaying the project, Reddy said.

The construction and power firm is also looking at lowering the interest cost burden by raising funds through issuance of commercial paper. It had earlier received board approval for issuing of commercial paper of up to 750 million rupees.

Shares in Gayatri Projects have more than halved so far in 2011, while the benchmark has shed 20 percent so far. The firm’s shares closed up 3.91 percent at 146 rupees on the Bombay Stock Exchange.

 


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Gayatri Projects’ PE Deals, Rights Issue Delayed

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