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
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.