Twitter

MMRDA gives conditional approval to Mumbai Metro's debt resolution plan

The Mumbai Metropolitan Region Development Authority (MMRDA) has approved a debt resolution plan moved by Reliance Infrastructure (RInfra) led Mumbai Metro One Private Limited (MMOPL) on the condition that no additional fund will be given as well as the MMRDA's equity should not get diluted in the process.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

The Mumbai Metropolitan Region Development Authority (MMRDA) has approved a debt resolution plan moved by Reliance Infrastructure (RInfra) led Mumbai Metro One Private Limited (MMOPL) on the condition that no additional fund will be given as well as the MMRDA's equity should not get diluted in the process.

MMRDA holds 26% stake in Versova-Andheri-Ghatkopar Metro-1, while MMOPL holds 69% in the debt laden special purpose vehicle, the balance is held by Trans Dev lle De France.

As per data available with DNA, MMOPL’s debt service obligation is pending since March 2018 followed by losses of around Rs 1,390 crore. 

In the 147th authority meeting of the MMRDA, clearance was given to MMOPL on several conditions. The conditions include no further fund infusion from MMRDA or state government, no additional guarantees will be extended, MMRDA or government’s shareholding will not get diluted, rights and powers of MMRDA will remain unaffected or curtailed, the government is not liable for any costs, liabilities, among others.

Since May 2017, MMOPL has been in dialogue with the lenders – Syndicate Bank, Indian Bank, Bank of Maharashtra, State Bank of India, IDBI Bank and IIFC UK, to arrive at debt resolution for its Rs 1,928 crore loans. 

Once the resolution plan is implemented, MMOPL’s books will have a debt of Rs 1,020 crore of the existing Rs 1,928 crore. The balance Rs 908 crore will get converted into Compulsorily Redeemable Preference Shares for a tenure of 20 years.

Among the factors for high debt level is cost overuns for the 11.4-km long alignment. However, the cost increase has been challenged by the MMRDA and thereafter RInfra moved the subject for arbitration, an outcome of which is pending. Meanwhile, Daily 4 lakh commuters use Metro-1 that started its commercial operations in June 2014.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.

Live tv