GMR Infrastructure Ltd. still faces some pain at a few subsidiaries even though the developer of Hyderabad and Delhi airports pared its debt by half to Rs 19,856 crore, the company's auditor said.
Strategic debt recast, stake sales, and an arbitration award for an airport project cancelled by the Maldives government helped the company turn profitable in the year ended March, the company said in a statement. Net debt-to-operational income ratio fell by more than half to 4.3.
Also Read: GMR Infrastructure Reports Lowest Annual Loss In Three Years
The turnaround comes with a few caveats highlighted by its auditor in the notes to the company's earnings statement.
GMR Hyderabad Vijayawada Expressways Pvt. Ltd. has dues pending from the National Highway Authority of India (NHAI), the auditor said. The company, which has been incurring losses since inception, believes that revenue losses stem from the political decision to carve out Telangana from Andhra Pradesh, leading to a drop in traffic. The company filed a claim of Rs 222.79 crore to recover loss of revenue till March 2016. NHAI, however, rejected the claim, prompting the company to initiate arbitration.
There has been no progress on a 300-megawatt plant in Uttarakhand being set up by GMR Badrinath Hydro Power Generation Pvt. Ltd after the Supreme Court halted construction on 24 projects in the aftermath of the 2013 floods, the auditor said.
GMR Power Corporation Ltd. has approached the Tamil Nadu Electricity Regulatory Commission to resolve claims arising out of power-purchase and land lease agreements. The company claimed Rs 481.6 crore and has already recognised Rs 80 crore in the books, the auditor said.
GMR Infrastructure's subsidiary in Cyprus is also facing difficulties amid an economic slowdown in the Mediterranean nation. Its fixed deposits of Rs 230 crore with Eurobank in Cyprus may be difficult to recover, the auditor said, adding that the management is, however, confident of withdrawing the funds.
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