Long wait for equity investor gives GMR ₹4k-cr windfall
MUMBAI: GMR Group has reaped a windfall gain from a year-long delay in securing government approval for a potential investment by a Tata group-led consortium in its airports business which saw the debt-laden group’s valuation surge more than 22%, or ₹4,000 crore.
Last week, GMR Infrastructure Ltd announced a strategic partnership with France’s Groupe ADP for its airports business, which is now valued at ₹22,000 crore. This is significantly higher than the enterprise value of ₹18,000 crore pegged to the business in an offer made last March by a consortium, comprising the Tata group, Singapore’s GIC Pte. Ltd and Hong Kong-based SSG Capital Management.
Groupe ADP, whose flagship airport holdings include Parischarles de Gaulle, Paris-orly and Paris-le Bourget, will pick up a 49% stake in GMR Airports, giving the former a reasonable foothold in India’s rapidly-growing airports market, while injecting equity into one of the country’s most experienced airport operators. For GMR Infrastructure, the delay in closing its stake sale to the Tata-led consortium has proved to be a blessing in disguise. GMR took the intervening year, while waiting for regulatory approvals, to win two more airportbids—agreenfieldairport at Bhogapuram, in the outskirts of Visakhapatnam, and the Nagpur airport privatisation contract from state-run Airports Authority of India.
The higher valuation also indicates the growing clout of airports in the retail segment, where investors are becoming increasingly open to offer more premium for consumer retail opportunities offered by airports in major metros in India.
In a recent report, Shishir Baijal, chairman and managing director, Knight Frank India, said: “Today, non-aeronautical revenue has become a very vital component to measure an airport’s health and success ... airports are no longer mere transit hubs, but are emerging as retail destinations catering to the wellheeled consumer.”
FRANKFURT: Volkswagen AG reached an agreement with German consumer group VZBV to settle claims from hundreds of thousands of diesel-car owners on its home turf who argued that their vehicles lost value in the wake of the emission-cheating scandal.
VW agreed to pay €830 million ($912 million) as part of the settlement, the company said on Friday in an emailed statement.
The talks had temporarily collapsed earlier this month before both sides resumed discussions to hammer out a deal after all.
The pact represents a “a fair and verifiable settlement solution,” VW legal chief Hiltrud Werner said in the statement. The company “will now do everything in our power to offer and make the one-time payments as quickly as possible,” she said.
The diesel-emission scandal continues to haunt VW since it admitted more than four years ago that it used engine software in as many as 11 million diesel vehicles that was designed to bypass emission tests.