Paris airport operator gives GMR Infra money to repay debt and access to global projects
- GMR Infrastructure Ltd (GIL) has entered into a strategic partnership with France's Groupe ADP to sell 49% stake in its airports arm for ₹10,780 crore.
- The first tranche of ₹5,248 crore will be received by GMR Group immediately.
- GMR will retain management control of the airports business while Group ADP will have representatives in the Board of Directors.
GMR Infrastructure's share price soared over 11% on Monday (Feb 24) after the company announced that it has agreed to sell 49% stake in its airports business to Groupe ADP, which operates the
Charles-de-Gaulle airport in Paris.
Investors lapped up the shares of the Indian company that operates the airports in Delhi and Mumbai as the deal would give the much-needed money to repay debt as well as add credibility to GMR's ability to build and operate airports in other parts of the world.
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GMR Infra's net debt at the end of December 2019 stood at about ₹25,700 crore, according to Edelweiss. Aside from this, there are foreign-currency (convertible into shares) loans worth $300 million (about ₹ 21,000 crore). 43% of that belonged the infrastructure major's airport vertical.
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The first tranche of ₹5,248 crore will be received by GMR Group immediately, according to a company statement.
"This money will help deleverage the Group further and result in improved cash flows and profitability. As part of the terms of transaction, GMR will retain management control of the airports business while Groupe ADP will have the customary rights and board representation at GAL and its key subsidiaries," it added.
The development assumes significance since last year GIL had announced a pact with Tata Group and other investors to divest 49% stake in its airports business. However, there has been no movement regarding the same.
GMR Group's airport portfolio has around 172 million passenger capacity in operation and under development, comprising India's busiest Indira Gandhi International Airport in New Delhi, Hyderabad's Rajiv Gandhi International Airport and the Mactan Cebu International Airport in partnership with Megawide in the Philippines.
While greenfield projects under development include airport at Mopa in Goa and at Heraklion, Greece, in partnership with GEK Terna.
The Group has also received Letter of Intent for development and operations of Nagpur Airport on PPP basis and has further emerged as the highest bidder for the development and operation of the greenfield airport at Bhogapuram in Andhra Pradesh.
Furthermore, the group recently signed concession agreement to commission, operationalise and maintain the civilian enclave at the Bidar Airport in North Karnataka.
With inputs from IANSSEE ALSO:Here's how Max Financial deal with Axis Bank will benefit both companies