NEW DELHI: After airways, the Tata Group has now made its foray into the airport sector. Tatas, GIC and SSG Capital Management will make investments Rs eight,000 crore in infra main GMR’s airport arm, valuing GMR Airports at virtually Rs 22,500 crore. The funding will help GMR Group cut back its debt burden as it's lately engaged in creating and expanding airports with in India and out of the country.
“GMR Infrastructure Limited (GIL) Wednesday introduced a proposed funding by means of Tata Group, Singapore’s sovereign wealth fund GIC and SSG Capital Management in its airports business. GIL has signed a binding time period sheet with the Investors pursuant to which the Investors have agreed to speculate Rs eight,000 crore in GMR Airports Limited (GAL),” GMR stated in a commentary Wednesday.
“The funding amount of Rs eight,000 crore will include Rs 1,000 crore fairness infusion in GAL and Rs 7,000 crore against purchase of GAL’s fairness shares from GIL and its subsidiaries. The proposed funding is matter to definitive documentation, commonplace regulatory approvals, lender concurs and different approvals,” it added.
Following the funding, GIL proposes to demerge its energy, highways, urban infrastructure and transportation companies, leading to separation of its airport business. “This is a significant development for GIL with a couple of strategic advantages (like) significant deleveraging at GIL; funding by means of marquee buyers for growing a global elegance portfolio of airport property and paves the best way for restructuring of the business by way of demerger. As a part of the terms of the proposed funding, GIL will retain management keep an eye on over the airports business with the buyers having commonplace rights and board representation at GAL and its key subsidiaries,” the commentary stated.
“The buyers have pegged 100% fairness valuation for GAL at… Rs 18,000 crore plus earn-outs of as much as Rs four,475 crore linked to success of positive agreed milestones and performance metrics over subsequent 5 years. Thereby, general valuation assuming all earn-outs are successfully consummated, will probably be Rs 22,475 Crores on Post Money Basis,” it added.
As a part of this transaction, GIL plans provide go out to present personal fairness buyers who hang 5.eight% fairness stake in GAL. At final, GIL and its subsidiaries will hang 54% stake in GAL, Tata 20%, GIC 15%, SSG 10% and Employee Welfare Trust 2%.
GIL MD and CEO Grandhi Kiran Kumar stated: “We are very happy to welcome Tata, GIC and SSG as long-term buyers in GAL. The proposed funding endorses the energy of the unparalleled airport platform created by means of GMR Group and can cut back our debt considerably, strengthening our stability sheet. This proposed funding by means of marquee buyers like Tata, GIC and SSG reaffirms the numerous and long-term funding opportunity in the speedy growing airport infrastructure space with a big pool of capital that may be tapped to grow GMR Airport infrastructure business.”
GMR Group’s Airport portfolio has round 16 crore passenger capacity in operation and under development, comprising of India’s busiest IGIA in Delhi, Hyderabad’s RGIA, Mactan Cebu International Airport in partnership with Megawide in Philippines. Greenfield tasks under development contains Airport at Mopa in Goa and Airport at Heraklion, Crete, Greece in partnership with GEK Terna. The GMR-Megawide consortium has won the Clark International Airport’s EPC challenge, the second one challenge in Philippines. The Group recently received Letter of Intent for development and operations of Nagpur Airport on PPP basis and development and operation of greenfield airport at Bhogapuram in Andhra Pradesh.
“GMR Infrastructure Limited (GIL) Wednesday introduced a proposed funding by means of Tata Group, Singapore’s sovereign wealth fund GIC and SSG Capital Management in its airports business. GIL has signed a binding time period sheet with the Investors pursuant to which the Investors have agreed to speculate Rs eight,000 crore in GMR Airports Limited (GAL),” GMR stated in a commentary Wednesday.
“The funding amount of Rs eight,000 crore will include Rs 1,000 crore fairness infusion in GAL and Rs 7,000 crore against purchase of GAL’s fairness shares from GIL and its subsidiaries. The proposed funding is matter to definitive documentation, commonplace regulatory approvals, lender concurs and different approvals,” it added.
Following the funding, GIL proposes to demerge its energy, highways, urban infrastructure and transportation companies, leading to separation of its airport business. “This is a significant development for GIL with a couple of strategic advantages (like) significant deleveraging at GIL; funding by means of marquee buyers for growing a global elegance portfolio of airport property and paves the best way for restructuring of the business by way of demerger. As a part of the terms of the proposed funding, GIL will retain management keep an eye on over the airports business with the buyers having commonplace rights and board representation at GAL and its key subsidiaries,” the commentary stated.
“The buyers have pegged 100% fairness valuation for GAL at… Rs 18,000 crore plus earn-outs of as much as Rs four,475 crore linked to success of positive agreed milestones and performance metrics over subsequent 5 years. Thereby, general valuation assuming all earn-outs are successfully consummated, will probably be Rs 22,475 Crores on Post Money Basis,” it added.
As a part of this transaction, GIL plans provide go out to present personal fairness buyers who hang 5.eight% fairness stake in GAL. At final, GIL and its subsidiaries will hang 54% stake in GAL, Tata 20%, GIC 15%, SSG 10% and Employee Welfare Trust 2%.
GIL MD and CEO Grandhi Kiran Kumar stated: “We are very happy to welcome Tata, GIC and SSG as long-term buyers in GAL. The proposed funding endorses the energy of the unparalleled airport platform created by means of GMR Group and can cut back our debt considerably, strengthening our stability sheet. This proposed funding by means of marquee buyers like Tata, GIC and SSG reaffirms the numerous and long-term funding opportunity in the speedy growing airport infrastructure space with a big pool of capital that may be tapped to grow GMR Airport infrastructure business.”
GMR Group’s Airport portfolio has round 16 crore passenger capacity in operation and under development, comprising of India’s busiest IGIA in Delhi, Hyderabad’s RGIA, Mactan Cebu International Airport in partnership with Megawide in Philippines. Greenfield tasks under development contains Airport at Mopa in Goa and Airport at Heraklion, Crete, Greece in partnership with GEK Terna. The GMR-Megawide consortium has won the Clark International Airport’s EPC challenge, the second one challenge in Philippines. The Group recently received Letter of Intent for development and operations of Nagpur Airport on PPP basis and development and operation of greenfield airport at Bhogapuram in Andhra Pradesh.
Tatas, GIC & SSG to buy stake in GMR Airports by investing Rs 8,000 crore
![Tatas, GIC & SSG to buy stake in GMR Airports by investing Rs 8,000 crore]()
Reviewed by Kailash
on
March 27, 2019
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