Thursday, August 6

GMR closes stake sale deal in airport biz to France’s ADP

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New Delhi: GMR Infrastructure Ltd, the company that operates Delhi and Hyderabad airports, today said that it has successfully completed its deal to sell 49% stake in its airports’ business to France’s Groupe ADP.

The contours of the deal, however, has undergone ‘slight modifications’ due to circumstances arising out of the economic impact of COVID19 pandemic on businesses.

“As per the revised Share Purchase Agreement, the second tranche of the investment for 24.01% of GMR Airports Limited (GAL) has been structured in two parts: A firm amount, immediately paid at Second closing, for a total of Rs 4,565 Crore, including Rs 1,000 crore equity infusion in GAL. Earn-outs amounting to Rs 1,060 Crore, subject to the achievement of certain performance related targets by GAL up to FY2024,” said a statement from the company.

The release added that Groupe ADP has increased earn-outs for GMR – linked to the achievement of certain agreed operating performance metrics as well as the receipt of certain regulatory clarifications over the next 5 years – and are now pegged at up to Rs 5,535 crore compared to the earlier Rs 4,475 crore.

In February 2020, GMR Group had signed an agreement with Groupe ADP to divest 49% stake in GAL for an equity consideration of Rs 10,780 crore.

As part of the two-step deal will see the French company initially buying 24.99% in GMR Airports, and later topping it up by purchasing 24.01% more. The first tranche of Rs 5,248 crore was immediately received by the GMR Group and was used to service debt of the company.

The company said that the amount of Rs 4,565 Crore towards second & final tranche payment from Groupe ADP has been received and ‘will primarily be used in servicing the debt.’

With this the GMR group finally concludes stake sale in GAL. An earlier deal with a Tata-led Consortium and comprising an affiliate of Singapore’s GIC as well as Hong Kong’s SSG Capital Management to sell 44.44% stake in its airports business for Rs 8,500 crore hit a hurdle.

The deal was not approved by the government due to a rule that an entity owning a stake in an Indian airline can’t own more than 10% in a local airport and.

Tata Sons owns over half of Vistara and AirAsia India, and the earlier proposed 20% stake in GMR’s airports business would give it 12.8% holding in the Delhi airport.

GMR operates India’s busiest airport in Delhi and the fourth-busiest in Hyderabad. It is building a new airport in Goa and has won the contract to manage the airport at Nagpur. It operates the Mactan-Cebu International Airport in the Philippines and is building a new airport in Crete Island, Greece.

Groupe ADP operates three airports in Paris — Charles de Gaulle, Orly and Le Bourget — besides 26 other airports internationally.

Source: ET Markets

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