Infrastructure major GVK Power & Infrastructure Ltd is preparing to monetise the real estate at the Mumbai international airport.
Mumbai International Airport Ltd (MIAL), a GVK company developing the airport, has been working on unlocking the value of the property that has been allowed to be monetised as part of its agreement to modernise and develop the airport.
“We expect the monetisation process to start by June this year. The initial plan is to monetise about 2.9 million square feet,” Isaac George, director of GVK Power, told analysts on an earnings call.
However, the quantum of funds that can be raised by way of monetisation is still not known.
“One last signature has to be obtained on the documents for monetisation from the Maharashtra chief minister. Though the CM signed on the documents in the capacity of the chairman of MMRDA (Mumbai Metropolitan Regional Development Authority), he is yet to clear the file as the chief minister. But we expect the benefits of monetisation to accrue during the next fiscal,” George said.
GVK was allowed to monetise about 10% of the airport land, or about 198 acre, with an objective to help the company raise resources to complete the development of the airport. For the third quarter ended December, GVK Power’s revenues fell 12% year on year at `648.68 crore while loss widened to `57 crore from `14.50 crore a year ago. The loss in the July-September quarter was at `43.66 crore.
“The non-availability of gas for three of our power projects and high interest charge have contributed to the rise in losses,” George said.
The company operates three gas-based power projects – Jegurupadu I, Jegurupadu II and Gautami – in Andhra Pradesh with a total capacity of about 908 mw. Of these, Jegurupadu I depends on gas supplies from GAIL and has recorded 55% plant load factor.
However, the remaining two projects depend on gas supplies from Reliance. With the gas supplies from Reliance remaining inadequate, Jegurupadu II operated at about 29% PLF and Gautami at about 19%.
GVK’s total interest charge for the quarter remained at about `193 crore. Of this, about `116 crore was paid out on the borrowings made for stake acquisition in its airport companies.