KKR investing $164.2M in GMR Holdings through structured finance deal

PE major Kohlberg Kravis Roberts & Co (KKR) has signed a term sheet to provide Rs 1,000 crore ($164.2 million) of structured long-term financing, with unnamed co-investors, to GMR Holdings Pvt Ltd, a holding company of GMR Infrastructure Ltd (GIL), as per a release.

The deal is subject to customary transaction documentation and further terms of the transaction have not been disclosed.

GMR Infrastructure has a huge debt pile and it is bringing it down by way of divestment of its assets besides fresh fundraising.

GMR Holdings will infuse funds in GMR Infrastructure in the form of equity capital which will help GIL to further strengthen its balance sheet, support the funding requirement for projects and meet its financing obligations.

"We are delighted to have entered into this partnership with GMR, which has been at the forefront of high-quality infrastructure development in India. 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 Krishnan, MD, KKR Capital Markets.

KKR, a leading global investment firm that manages investments across multiple asset classes including private equity, has been actively backing Indian business houses through debt as well as equity funding.

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.

In May this year, Chennai-based industrial conglomerate Archean Group raised an undisclosed amount in mezzanine funding from KKR.

GMR Group is one of the largest infrastructure enterprises in India with interests in the airport, energy, highway and urban infrastructure sectors.

GMR's listed flagship GMR Infrastructure has also just got a board approval to raise up to Rs 1500 crore (around $246 million) through rights issue to existing shareholders, as part of its efforts to bring down high-cost debt.

"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. This partnership with KKR helps GMR strengthen its foundation for the next phase of growth," said Grandhi Kiran Kumar, group director, GMR Holdings.

(Edited by Joby Puthuparampil Johnson)

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