GMR nets Rs.1,740 cr from divestment of Istanbul Airport

Divestment also helps group reduce debt of Rs 1,412 cr and as guarantees to an extent of Rs 2,298 cr

GMR Infrastructure, on Wednesday said it has received Rs 1,740 crore (Euro 209 Million) as culmination of divestment of its 40 per cent equity stake in Istanbul Sabiha Gökçen Uluslararasi Havalimani Yatirim, Yapim Ve Isletme A.S ("ISG") and LGM Havalimani Isletmeleri Ticaret Ve Turizm A.S ("LGM Tourism") to Malaysian Airports Holding Berhard ("MAHB") in terms of definitive agreements signed subsequent to the exercise of Right of First Refusal by MAHB under the existing shareholders agreement of ISG, on 23 December 2013.

This is the second major divestment of overseas assets by the GMR Group in over a year. This divestment helps the group in capitalizing on equity release of Rs 1,740 crore, in addition to reducing the proportionate debt of Rs1,412 crore carried in the balance sheet as well as guarantees to an extent of Rs 2,298 crore.

Commenting on this transaction, G M Rao, Group Chairman, GMR Group said, "This transaction signifies GMR's ability and consistent delivery in finding the best value for its assets and also to execute and complete a complex, cross boarder transaction at a time when the infrastructure segment is passing through a rough phase. GMR will continue to be a significant global airport operator with the recently won concession for developing Mactan Cebu International Airport in Philippines and will continue to add "Right Assets" to maintain sizeable levels of revenues and assets. We at GMR Group continue to focus on capital recycling, creating liquidity and enhance value by effective portfolio management under our ALAR (Asset Light Asset Right) Strategy. The efforts taken by the Group in recent times shall strengthen our Balance Sheet"

The consortium of Limak Holding, GMR Group and MAHB was selected as the preferred bidder for upgrading and maintaining the Istanbul Sabiha Gökçen International Airport in July 2007. The airport's new terminal was completed in a record time and was commissioned in October 2009, 12 months ahead of schedule. LGM Tourism undertakes the operation of non-aero services such as hotel, food & beverages, and lounge at the airport.

Rothschild (India) and White & Case LLP acted as Financial Advisors and Legal Counsels respectively to GMR Group.