GMR Infrastructure has inked a foreign currency convertible bond private-placement deal with Kuwait Investment Authority (KIA) for $300 million (approximately Rs 2,000 crore).
"Kuwait Investment Authority today agreed to subscribe to a sixty-year long Foreign Currency Convertible Bond (FCCB) due 2075 to be issued by GMR, the flagship company of the GMR Group," GMR Infrastructure said in its filing to the BSE on Friday.
After the announcement, the company's shares bounced to an intraday high of Rs 16.80, up 8.7% from previous day's close. At 1157 hours, the company's shares were trading slightly lower at Rs 16.45, up Re 1 or 6.47% from previous day's close.
Kuwait Investment Authority is one of the largest and oldest sovereign wealth fund of the world.
“This is the largest bilateral investment of Kuwait Investment Authority in India. This investment shows confidence of sovereign investors in the long-term policies being implemented by the Government of India, particularly in the infrastructure space," said GMR Group's Chairman G M Rao in the statement.
"We are thankful to the Government of India and the Reserve Bank of India for adopting pragmatic policies enabling high quality Indian companies to seek out long-term foreign investors," Rao added.
We are grateful to Kuwait Investment Authority for choosing GMR Group for their first bilateral investment in the country, he said.
GMR’s FCCB issuance is the longest tenor convertible issuance out of India and will have several “equity-like” features such as long tenor, unsecured and subordinated status and mandatory conversion, cited the statement.
The proceeds from the FCCB will be primarily used to repay certain outstanding obligations of GMR and its subsidiaries, it said.
"We are happy to receive this investment from Kuwait Investment Authority and believe that this will be a game changer for our group. It will symbolise high quality investors’ confidence in the long-term opportunity in GMR," said GMR's Managing Director Kiran Kumar Grandhi in the statement.
"It will help the company to meet the challenges being faced by the sector and deleverage our debt exposure," Grandhi added.
GMR Group is a leading global infrastructure conglomerate with interests in airport, energy, transportation and urban infrastructure.
