new strategic partnership with tenaga nasional berhad 09 may 2016 - strategic... · 2016. 5. 9. ·...
TRANSCRIPT
0 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Strategic Partnership with
Tenaga Nasional Berhad
09 May 2016
1 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
DISCLAIMER
The materials being shown in this presentation is solely for information and not to be reproduced, retransmitted, further distributed to any other person or published, in whole or
in part, for any other purpose.
These materials have been prepared by GMR Infrastructure Limited (the "Company") solely to be used for this presentation. No representations or warranties, express or
implied, are made by the Company or its subsidiaries (collectively, the “Group”) or any of their respective members, directors, officers or employees or any other person as to,
and no reliance should be placed on, its fairness, accuracy, completeness or correctness of the information or opinions presented or contained in these materials and have not
been independently verified.
It is not the intention to provide a complete or comprehensive analysis of the financial or trading positions or prospects of the Company or the Group. None of the Company or
the Group or any of its directors, officers, employees, agents, affiliates, advisers or representatives accepts any liability whatsoever from any loss howsoever arising from any
information or opinions information or opinions presented or contained in these materials or otherwise arising in connection with these materials. The information and opinions
presented or contained in these materials are provided as on the date of this presentation and are subject to change without notice and the accuracy of the information is not
guaranteed.
This presentation is for information purposes only and is not and does not constitute or form part of any offer, invitation or recommendation to purchase or subscribe for any
securities and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto. This presentation
may not be used or relied upon by any other party, or for any other purpose, and may not be reproduced, disseminated or quoted without the prior written consent of the
Company. This presentation should not be relied upon as the basis of an investment decision in securities of the Company or the Group.
The distribution of this presentation in certain jurisdictions may be restricted by law and persons who come into possession of this presentation should observe any such
applicable restrictions. The Company or its Group cannot be held liable for distribution of the presentation by the investors who come into possession of the presentation or for
non compliance with applicable laws or restrictions.
This presentation and the discussion that follows may contain “forward looking statements” relating to the Company or the Group. These forward looking statements, which
may include statements relating to future results of operation, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions,
expectations, estimates, and projections of the directors and management of the Company about the business, industry and markets in which GMR Infrastructure the Group
operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are
beyond the Company’s or the Group’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward
looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of the Group. In particular, such
statements should not be regarded as a projection of future performance of the Company or the Group. It should be noted that the actual performance or achievements of the
Company and the Group may vary significantly from such statements.
2 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Background
• Structural issues & headwinds in the Power sector are getting gradually addressed through Government’s
recent reform initiatives like UDAY, e-RLNG bid scheme, Coal rationalisation policy, etc. Also domestic coal
production scenario has improved significantly
• GMR Energy Ltd. (GEL) has been committed to protecting the interests of all its stakeholders
o It has completed all its under construction projects viz. 3,000 MW of coal based projects and 768 MW
of gas based project
o Post commissioning of these projects, GEL has been focused on stabilizing the projects and improving
the profitability of the projects
o Also, GEL has received favourable tariff orders in the past few months improving its visibility of cash
flows and profitability
• GMR has always forged long term partnership with best-in-class strategic & financial institutions across its
businesses including Fraport, MAHB, Temasek, IDFC, Kuwait Investment Authority, etc.
o Now, it has been able to induct a financially sound & reputed international strategic partner in its
Energy business
Proposed investment of USD 300 mn by Tenaga Nasional Berhad (Tenaga) for 30% equity
interest in a select portfolio of GEL
3 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
GMR Infrastructure
Ltd
GMR Energy Ltd
Kamalanga Power
Plant- 1,400MW
Warora Power Plant-
600MW
Vemagiri Power
Plant- 388MW
Gujarat Solar Plant-
25MW Bajoli Holi Hydro
Project- 180MW
Upper Karnali Hydro
Project- 900MW
Upper Marsyagadi
Hydro Project-
600MW
Alaknanda Hydro
Project- 300MW
Thermal
(Coal & Gas)
Renewable
(Hydro & Solar)
Chhattisgarh Power
Plant – 1,370MW Other Power Assets
Indonesia coal mines
Other Assets
Maru & Aravalli
Transmission
Private Equity
Investors
Operational Under Construction Under Development
93.5%*
6.5%
Rajahmundhry
Power Plant- 768MW
* Includes both direct & indirect holding
Kamalanga Power Plant includes 350MW of Unit 4 which is under development
Current Structure of GMR Energy
Barge Plant- 235MW
Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
About the Transaction
5 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Overview • Primary investment of $300m (~Rs 2,000 cr) by Tenaga Nasional Berhad in GMR Energy for 30% stake on a
fully diluted basis
Structure
• Investment by Tenaga would be in select portfolio of assets of GEL
o Selected assets would be in Portfolio A (depicted in Slide 6)
o Assets included in Portfolio B (depicted in Slide 6) will include Chhattisgarh and Rajahmundry Power plants
− Tenaga has right to invest in Chhattisgarh and other assets at the Fair Market Value (FMV) any time
within the next 5 years
o Indonesian coal mines would remain outside of GEL since Tenaga does not want to take exposure in
commodities
GEL Valuation • Equity Value of USD 1 bn (~Rs 6,665 cr1)
Key Terms &
Conditions
• Proceeds from the transaction (~Rs 2,000 cr) to be used for corporate debt servicing
• All convertible instruments (Private Equity players) to be converted into equity shares prior to the transaction
• GMR would remain the majority shareholder
• Subject to conditions customary to a transaction of this nature including applicable regulatory approvals from
Malaysia and India, applicable lender consents, restructuring of GEL including carve out of assets, etc
Assuming an INR/ USD exchange rate of 66.65
Broad Terms of the Transaction
6 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Revised Structure of GMR Energy
GMR Infrastructure
Ltd
GMR Energy Ltd
Kamalanga Power
Plant- 1,400MW
Warora Power Plant-
600MW
Barge Plant- 235MW
Gujarat Solar
Plant- 25MW
Bajoli Holi Hydro
Project- 180MW
Upper Karnali Hydro
Project- 900MW
Upper Marsyagadi
Hydro Project- 600MW
Alaknanda Hydro
Project- 300MW
Thermal
(Coal & Gas)
Renewable
(Hydro & Solar)
Chhattisgarh Power
Plant – 1370MW
Rajahmundry Power
Plant – 768MW
Other Assets
Other Power
Assets
Indonesia coal
mines
Excluded Assets
Maru & Aravalli
Transmission
Portfolio A – Tenaga is investing in this portfolio Portfolio B – Right to invest within 5 years
Tenaga Private Equity
Investors
52%*
18% 30%
* Includes both direct & indirect holding
Kamalanga Power Plant includes 350MW of Unit 4 which is under development
Operational Under Construction Under Development
Vemagiri Power
Plant- 388MW
7 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Bajoli Holi
(180 MW / Hydro)
Alaknanda
(300 MW / Hydro)
Upper Marsyangdi
(600 MW / Hydro)
Upper Karnali
(900 MW / Hydro)
Warora
(600 MW / Coal)
Kakinada
(235 MW / Gas)
Kamalanga
(1,050 MW / Coal)
Vemagiri
(388 MW / Gas)
Solar Plant
(25 MW)
Operational Assets
Projects Under Construction
Projects Under Development
Legends:
Portfolio A – Balanced Mix of Operational & Pipeline Projects
Kamalanga
(350 MW / Coal)
• Operating capacity of ~2,300 MW comprising 5 assets
o Warora – 600 MW coal based plant strategically located in
the high growth oriented western region of Maharashtra
o Kamalanga – 1,050 MW coal based plant strategically
located close to the coal belt of Odisha
o Vemagiri – 388 MW gas based plant
o Barge – 235 MW barge mounted gas based plant
o Gujarat Solar – 25 MW solar power plant located at Patan
• Additional pipeline capacity of ~2,330 MW comprising 5
under construction / development assets
o Kamalanga Unit 4 – 350MW extension of Kamalanga
o Bajoli Holi – 180 MW hydro facility on the River Ravi
o Upper Karnali – 900 MW hydro project on the river Karnali
o Upper Marsyangdi – 600 MW hydro project on the river
Marsyangdi
o Alaknanda – 300 MW hydro project on the Alaknanda River
Balanced mix of Coal (2,000 MW), Gas (623 MW) and Renewable energy - Hydro (1,980 MW)
& Solar (25 MW)
8 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Project Location Fuel Capacity (MW) COD
Chhattisgarh Raipur Coal 1,370 Unit 1 – Nov 2015
Unit 2 – Mar 2016
Rajahmundry Rajahmundry Gas 768 Unit 1 – Oct 2015
Unit 2 – Oct 2015
Total 2,138
• Tenaga would have a right to invest in these assets anytime within the next five years
• Adds further strategic value to the portfolio by adding ~2,000 MW of operating capacity and increase its total
portfolio to over 6,700 MW
Portfolio B - Right to Invest in Additional ~2,000 MW of Capacity
Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
Merits of the Partnership
10 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Merits of the Partnership
1
3
Strong synergies from the strategic partnership with Tenaga
Strengthening of Balance Sheet
Attractiveness of GMR Energy from a value unlocking perspective
2 Strong visibility of cash flows from operational portfolio
4
Highlights the strength and resilience of the Group 5
11 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
(Year ending Aug’15, USD bn)
Mcap (as on 09 May’16) 20.0
Shareholders equity 11.3
Total borrowings 5.9
Total Fixed Assets 21.6
Revenue 10.3
EBITDA 3.3
Net Profit 1.5
STRONG FINANCIAL POSITION
• Tenaga is the largest electricity utility in Malaysia and one of the largest power companies in Southeast Asia. Its core businesses span the entire value chain of electricity production and supply encompassing Generation, Transmission and Distribution
• Total installed capacity of 10,818 MW with more than 50% market share of the Malaysian grid’s generation capacity & over 8.9 mn customers serving a peak load of ~17,000 MW
• Significant operational experience in managing and operating power assets with 6 thermal power plants, 3 large hydro plants and supporting O&M of three independent power producers (IPPs)
• Key Shareholders o Khazanah Nasional Berhad (~30%), o Employees Provident Fund Boards (~17%), o Foreign Investors (~23%)
OVERVIEW OF TENAGA NASIONAL BERHAD
OPERATIONAL OVERVIEW
Gas 48.1%
Coal 40.1%
Hydro 11.6%
Others 0.1%
10,818 MW
Strong Synergies from the Strategic Partnership with Tenaga (1/2) 1
12 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
• Partnership between one of the largest integrated utilities and an established player in the Indian Power sector will be a force multiplier to create one of the most valuable companies
• Tenaga’s presence across the power value chain viz. generation, transmission and distribution increases the bandwidth of GEL to capture future opportunities
• Rich experience of Tenaga in Operating & Maintaining thermal power plants will help GEL in achieving operational excellence in its thermal assets
• Tenaga’s experience in successfully developing hydro projects will strengthen implementation of our hydro projects
• Creation of GMR Energy platform will facilitate rerating of the Energy business leading to wider sources of funds at competitive terms
Strong Synergies from the Strategic Partnership with Tenaga (2/2) 1
All future investments in Indian Power sector would be through this platform
13 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
13
GEL has more than 80% of its capacity contracted under long-term PPAs ensuring
high visibility of cash flows
The key operational assets of GEL are largely contracted under long term PPAs
• Warora is fully contracted with 3 PPAs to Dadra & Nagar Haveli, Maharashtra and Tamil Nadu
• Kamalanga's ~85% capacity is contracted through 3 PPAs to Haryana, Bihar and Odisha
• Vemagiri – 388 MW is fully contracted with Andhra Pradesh
Majority of the capacity contracted under long term PPAs
600 1,050 235 Capacity (MW)
100% 85%
100% 100%
15%
100%
Warora Kamalanga Barge Vemagiri Solar
% PPAs % Remaining
Long term PPAs 83%
Remaining 17%
Details of Power Offtake Operational Projects
388 25
Strong Visibility on Cash Flows from Operational Portfolio 2
14 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
• Primary proceeds from Tenaga’s investment will be used for corporate debt servicing
o Reduction of GMR consolidated corporate debt by ~30%
o Savings of ~Rs 250 cr of interest expense on an annual basis
o Strengthening of the Balance Sheet
o Provides GEL with greater flexibility for future inorganic acquisitions and organic developments
• Convertible preference shares (CCPS) issued by GEL to Private Equity Investors would
be converted into Equity
* Unaudited company estimate as on 31 March 2016 & does not include FCCBs of Rs 2,000 cr
Repayment through
proceeds from Tenaga
~Rs 2,000 cr
GIL Consolidated
Corporate Loans *
Rs 6,375 cr
Balance Corporate
Loans
~Rs 4,375 cr
Strengthening the Balance Sheet
Primary capital infusion at GEL strengthens its balance sheet
3
15 Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
0
56
113
0
102
179
226
0
26
247
168
0
33
158
207
Key Merits of the Partnership
Highlights the
Strength and
Resilience of
the Group
4
Attractiveness
of GMR
Energy from a
value
unlocking
perspective
5
• Induction of a strong strategic partner provides renewed impetus to GEL
• Given the attractiveness of GMR Energy post the investment, it will have an opportunity
to unlock value at an appropriate time
• Proceeds from any value unlocking route would provide additional impetus to the overall
Group
• GMR Group has been focused on protecting the interests of the shareholders and
lenders. The Group raised
o Rs 1,477 cr QIP in July 2014
o Rs 1,402 cr Rights Issue in April 2015
o USD 300 mn Long Term FCCB from Kuwait Investment Authority in
December 2015
• Investment by Tenaga demonstrates the ability of the GMR Group to induct
strategic partner and reaffirms the long term value & potential of its Energy
business
Humility | Entrepreneurship | Teamwork and Relationships | Deliver the Promise | Learning | Social Responsibility | Respect for Individual
Thank You
For further information, please visit
Website: www.gmrgroup.in or
Contact: [email protected]