The GMR group today said that funding plan in its subsidiary – GMR Airports Ltd (GAL) – is on track despite the uncertain economic conditions, as its French partner has raised money through bonds to honour the payment plan.
In February 2020, GMR Group had signed an agreement with France’s Groupe ADP to divest 49% stake in GAL for an equity consideration of Rs 10,780 crore.
“Groupe ADP of France has successfully raised Euro 2.5 billion in bonds in two-parts. The two-part bonds having different maturity have been priced at effective interest rate of 2.125% and 2.75%, respectively. The bonds were over-subscribed by more than five times. This raising plan ensures that the payment plans remain intact,” said a company executive, who did not want to be identified.
The executive added that over-subscription of bonds in current economic scenario is also a testimony of faith international investors have in Groupe ADP, a global airport developer and operator.
As part of the deal, the group has already received the first tranche of Rs. 5,248 crore, which was utilised to deleverage the group and improve cash flow and profitability.
Groupe ADP had also pegged earn-outs up to Rs. 4,475 crore linked to achievement of certain agreed operating performance metrics as well as on receipt of certain regulatory clarifications over next 5 years.
The GMR group had last year announced a 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
But the deal hit a hurdle over the rule that an entity owning a stake in an Indian airline can’t own more than 10% in a local airport and was not approved by the government. 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.
This new deal values GMR’s airports business at Rs 22,000 crore, 22% more than what it was valued at by the Tata Group-led consortium.
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: Economic Times