GMR to up stake in DIAL to 64% as Malaysia Airports exits

With MAHB selling its stake, the GMR group's stake will rise to 64%. The deal will require AAI's approval

Malaysia Airports Holdings Berhad (MAHB) on Tuesday announced a sale of its entire 10 per cent stake in Delhi International Airport Limited (DIAL) to the GMR group for Rs 492 crore. It said having a minority share did not give it any influence over the venture.

DIAL was set up in 2006 as a joint venture of the GMR group (54 per cent stake), the Airports Authority of India, or AAI (26 per cent), and two foreign partners - Fraport AG and MAHB, 10 per cent stake each.

With MAHB selling its stake, the GMR group's stake will rise to 64 per cent. The deal will require AAI's approval.

In a filing to a Malaysian stock exchange, MAHB said it would sell 245 million shares for $79 million (Rs 492 crore) to GMR Airports Ltd.

The GMR group did not say how it would fund the purchase.

MAHB said it had recently realigned its investment objectives, to focus more on investments in companies where it could exercise significant control.

"As the existing shareholders' agreement restricts foreign ownership in DIAL to not more than 49 per cent, MAHB is of the opinion that it would not be in a position to exert influence over DIAL unless it is able to own majority shareholdings in it," the filing said.

For the transaction, Malaysia Airports (Mauritius), a wholly-owned subsidiary of MAHB, has entered into a conditional share sale agreement with GMR Airports.

Between April 10, 2006, and October 23, 2008, MAHB had invested $57.6 million, taking its stake to 10 per cent in DIAL. If the offloading of the 10 per cent stake was not completed before April 30, the sale consideration could be revised, the filing noted.

MAHB added the proposed sale was seen as a strategic opportunity to crystallise its investment after realising the value of the investment in DIAL.