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KKR announced yesterday that it has signed a term sheet to provide INR10 billion (US$164.2 million) of structured long-term financing, with co-investors, to leading Indian infrastructure development company GMR Holdings Pvt. Ltd. (GMR), the holding company for the GMR Infrastructure Ltd. (GIL), one of India's leading infrastructure business groups. The transaction is subject to customary transaction documentation. Further terms of the transaction have not been disclosed.
GMR Group is one of the fastest-growing infrastructure enterprises in India with interests in the airport, energy, highway and urban infrastructure sectors. 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.
Grandhi Kiran Kumar, Group Director, GMR Holdings, said:
"The infusion of additional equity from promoters of GIL is a testimony to the promoters' confidence in the long-term value of the Group's business. 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 to strengthen its foundation for the next phase of growth."
BV Krishnan, Managing Director, KKR Capital Markets, said:
"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."
In India, 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 US$2 billion of structured financing to 21 business groups in India through its credit and capital markets business over the past five years.