KKR backs Indian infrastructure firm

US alternative assets firm KKR has agreed to provide INR10 billion (€126.8 million; $164.2 million) of structured long-term financing, with a number of co-investors, to a holding company of Indian infrastructure firm GMR Infrastructure (GIL).

A term sheet has been signed, according to a statement, but further details of the transaction were not disclosed. 

The financing has been extended to GMR Holdings, an Indian infrastructure development company. It was arranged by KKR Capital Markets, which provides structured financing solutions through multiple capital pools including non-banking finance companies that allow overseas debt investment in India.

The holding company will invest in GIL in the form of equity capital to strengthen the firm’s balance sheet and support its funding requirement for projects and meet its financing obligations. The group overall has interests in the airport, energy, highway and urban infrastructure sectors.

Grandhi Kiran Kumar, group director at GMR Holdings, said: “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.”

KKR has executed more than $2 billion of structured financing to 21 business groups in India through its credit and capital markets business over the past five years.

BV Krishnan, managing director at KKR Capital Markets, said of its latest deal: “GMR represents a significant opportunity for KKR to partner with committed infrastructure groups which have developed world-class, highly relevant assets to build India.”