GVK to acquire Siemens'14% stake in Bangalore international airport

Hyderabad-based GVK Power & Infrastructure is all set to become the single largest shareholder of Bangalore International Airport. The company today said it was paying Rs 114 for each equity share to Siemens Project Ventures to buy the latter’s 14 per cent stake in Bangalore International Airport Ltd (BIAL). The company, which also runs Mumbai International Airport, will pay close to Rs 614 crore, valuing the Bangalore project at almost Rs 4,440 crore.

If this deal sails through, GVK Power, through its step-down subsidiary, Bangalore Airport & Infrastructure Developers Private Ltd, will have a 43 per cent stake in BIAL, while Siemens will have 26 per cent, Zurich Airport five per cent, and the remaining 26 per cent will be held equally by the Karnataka government and the Airports Authority of India.

GVK Power had been negotiating with Siemens for the past six months to buy out its 14 per cent stake and there had been serious differences on the valuations of the stake. According to industry analysts, GVK had offered Rs 60 a share but Siemens was looking at a higher price. “Changi Airport had offered Rs 114 per share and as part of the Right of First Refusal clause in the agreement, we matched that bid,” a senior GVK Power official told Business Standard.

Including the fresh deal to buy a part of Siemens’ stake, GVK would have paid almost Rs 1,800 crore to acquire a 43 per cent stake in the project. The said acquisition would be completed after obtaining the requisite approvals, if any.

GVK Power, during November 2009, first bought into BIAL by picking up a 12 per cent stake from Zurich International Airport for Rs 484 crore. A month later, it bought out the 17 per cent stake held by L&T Infrastructure Development Project for Rs 686 crore, pricing the acquisition at Rs 105 a share.

BIAL, one the latest greenfield airport projects in the country, started operating in May 2008 and was built at a cost of Rs 2,470 crore.

During mid-2011, GVK had announced that it was expanding its passenger terminal building which would take the capacity to handle 17 million passengers from the current 11 million, with the flexibility to expand it to 20 million.