AMP Cap­i­tal in Fi­nal Talks to Buy Stake in GVK’s Air­port Biz

Is also said to be in ne­go­ti­a­tions with Texas’ LoneS­tar to off­load stake in the air­port busi­ness

The Economic Times - - Companies: Pursuit Of Profit - In­du­lal PM & Baiju Kalesh

Mum­bai: TheGVKandGMR­groups,which rose to na­tional promi­nence af­ter win­ning mod­erni­sa­tion con­tracts for In­dia’s two big­gest air­ports, are in the fi­nal stages of sell­ing — in sep­a­rate deals — at least a fourth stake each in the hold­ing com­pa­nies that op­er­ate the Mum­bai and Delhi fa­cil­i­ties with a com­bined value of around $1 bil­lion.

GVK Power and In­fra­struc­ture, which runs Mum­bai a i r p o r t a n d GMR In­fra­struc­ture, which runs Delhi air­port, are set to off­load sig­nif­i­cant stakes in the en­ti­ties, mul­ti­ple sources with di­rect knowl­edge of the mat­ter told ET.

Aus­tralian in­fra­struc­ture in­vestor AMP Cap­i­tal is said to be in ad­vanced talks with GVK to pick up a strate­gic stake in the air­port hold­ing com­pany at a val­u­a­tion of about ₹ 3,000-3,500 crore. LoneS­tar, a Tex­as­head­quar­tered, long-term in­vestor is ne­go­ti­at­ing to in­vest in GMR’s air­port hold­ing en­tity at a val­u­a­tion of about ₹ 4,500 crore, said the peo­ple cited above.

Cit­i­group is man­ag­ing the sale for GVK and Mor­gan Stan­ley for GMR, they said.

Both groups are laden with debt and have been on a quest to raise funds to meet re­pay­ment obli­ga­tions. GVK Power’s to­tal debt stood at ₹ 12,855 crore in FY18, while GMR’s net debt is about ₹ 4,600 crore.

GVK op­er­ates the coun­try’s sec­ond-busiest air­port in Mum­bai and has de­vel­op­ment rights for a new air­port in the city’s out­skirts. GVK holds a 50.5% stake in Mum­bai In­ter­na­tional Air­port Ltd (MIAL), which owns 74% of Navi Mum­bai Air­port Pvt. The deal could in­volve pri­mary and sec­ondary sales as South Africa’s Bid­vest, which holds a 13.5% stake, is also look­ing to sell its shares. A pre­lim­i­nary agree­ment is ex­pected to be signed be­fore Di­wali, which is in early Novem­ber, said one of the sources men­tioned above. AMP Cap­i­tal de­clined to com­ment. “We don’t com­ment on mar­ket ru­mour or specu- la­tion… If there’s any change to that I’ll be sure to let you know.” GVK and Lone Star didn’t re­spond to queries, while GMR de­clined to com­ment.

If suc­cess­ful, the trans­ac­tion will mark GVK’s sec­ond stake sale in the air­port ver­ti­cal. The firm sold its con­trol­ling stake in Ban­ga­lore In­ter na­tional Air­port Ltd (BIAL) to Canada’s Fair­fax for about ₹ 3,500 crore in two tranches in 2016 and 2017. The firm had a 43% stake in BIAL.

Mum­bai air­port han­dled 48.50 mil­lion pas­sen­gers in 2017-18 and holds the record for be­ing the world’s busiest sin­gle-run­way air­port.

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