MIAL restructures loans worth ~10,600 crore ON A NEW ROUTE

Mumbai International Airport Pvt Ltd (MIAL), in which a GVK group company holds 50.5 per cent stake, has restructured its ~10,600-crore loan portfolio with its consortium of bankers.

MIAL has been able to refinance ~6,140 crore of longterm loans and has been provided ~2,155 core to refinance the securitised loan against the airport development fees paid by flyers. It has also been extended over ~800 crore working capital facility to retire existing working capital loans.

The tenure of the long-term loan is 14.5 years at an interest rate of 9.3 per cent per annum, to be reset at the anniversary of the drawdown every year. Two new lenders, Axis Bank and Vijaya Bank, have been added to the lending consortium with a combined exposure of over ~1,300 crore.

As security for the loan, 74 per cent of the shares of MIAL have been pledged to the lenders. The banks will also have first charge on the airport development fee escrow account and over another MIAL has refinanced both its long-term as well as working capital loans The loan has a tenure of 14.5 years, with an interest of 9.3 per cent per annum It had provisional net loss of ~104 cr on a provisional operating income of ~3,097 cr in FY17 escrow account which is to be maintained for cash flow, after meeting statutory dues and payments to the Airports Authority of India (AAI).

The prime members, which include GVK and ACSA Global, have also provided a shortfall undertaking to the lenders.

A spokesperson for MIAL declined to comment on the issue. Mumbai airport handled 45 million passengers in 2016-17. Passenger growth at the airport has been at least 12 per cent annually in the recent years.

According to ratings agency CRISIL, MIAL’s aero revenues are stable and backed by a regulatory mechanism. Its non-aero revenues are expected to increase from 43 per cent in 2015-16 to 60 per cent of the total over the medium term.

MIAL also has the right to develop 194 acres of land around the airport, of which it had monetised only two acres in 2016-17. The company has concluded the bidding process for an additional 17 acres.

MIAL is also the highest bidder for implementing the Navi Mumbai airport. The project is expected to get off the ground in the next five years as the current airport approaches its peak capacity.

MIAL, which holds a 30-year concession for the Mumbai airport (extendable by another 30 years), is a joint venture among GVK Airport Holdings, AAI and some other partners. According to CRISIL, the provisional net loss of MIAL in 2016-17 was ~105 crore on an operating income of ~3,097 crore.