Mumbai International Airport aims to monetise 20-25 acres to pare debt

Mumbai International Airport Ltd (MIAL) aims to monetise 20-25 acres in this financial year and use the money to pare debt.

A report by credit rating agency CRISIL says their cash balance reduced from Rs 1,270 crore at end-March 2018 to Rs 300 crore this March. This was due to higher upfront investment in the Navi Mumbai airport project, muted traffic growth due to curtailment of flights by crisis-hit Jet Airways and increase in debt repayment due to a delay in loan restructuring.  

CRISIL reaffirmed an AA-negative and stable rating for MIAL’s Rs 10,500 crore debt. The company, it said, would have the liquidity to meet its near-term debt obligation, with stability in operations and no requirement for investment in the Navi Mumbai project during 2019-20.

Jet suspended operations on April 17. It was the largest airline at Mumbai, with 140-plus departures each day and a wide international network connecting cities in Asia and Europe. 

Mumbai is the second busiest airport in the country (after Delhi). It handled 48 million passengers in 2018-19 — international traffic grew 5.7 per cent but domestic traffic fell by 1.3 per cent.

The land parcels in question are close to the international terminal and can fetch a lease rent of around Rs 175 a sq ft. An MIAL spokesman did not comment. “The commercial real estate market is vibrant. Mumbai airport land parcels will be attractive for hotels and office complexes, given its proximity to the Bandra Kurla Complex,” said Anuj Puri, chairman, Anarock Property Consultants.

The GVK group runs MIAL. It has the right to commercially develop 194 acres of airport-owned land but has been able to monetise only three lots, measuring six acres, in over a decade. In 2013, it had called bids for 10 acres, as part of its plan to lease airport property for hotels, offices and convention centres, titled SkyCity development. However, there have been delays in clearance, apart from encroachment and a slump in the realty market. In 2014, MIAL sub-leased 5.5 acres to Oasis Realty in a Rs 580-crore deal but that fell through.