GMR Group concludes deal with Groupe ADP for 49% stake sale in airport arm

The contours of the deal have however undergone slight modifications considering the unprecedented circumstances arisen due to the pandemic.

GMR Infrastructure on Tuesday (7 July) said it has successfully completed the previously announced strategic partnership with Groupe ADP.

As per the revised share purchase agreement, the second tranche of the investment for 24.01% of GMR Airports has been structured in two parts: a firm amount immediately paid at second closing of Rs 4,565 crore, including Rs 1,000 crore equity infusion in GMR Airports (GAL) and earn-outs amounting to Rs 1,060 crore subject to achievement of certain performance related targets by GAL upto FY2024.

Accordingly, Groupe ADP has increased earn-outs for GMR to Rs 5,535 crore, up from the earlier Rs 4,475 crore, which are linked to operating performance metrics and receipt of certain regulatory clarifications over the next 5 years.

In February 2020, the GMR group had announced it will sell 49% stake in GAL to Groupe ADP, valuing GMR Airports at Rs 22,000 crore. At the time of that announcement, ADP had infused Rs 5,248 crore and now the second tranche of balance Rs 4,565 crore has come. This money will primarily be used in servicing the debt which will help deleverage GMR Group further and result in improved cash flows and profitability.

As part of the terms of transaction, GMR will retain management control over the airports business with Groupe ADP having the customary rights and board representation at GAL and its key subsidiaries.

Shares of GMR Infrastructure declined 0.94% at Rs 21 on BSE. The scrip hovered in the range of Rs 21 to Rs 21.70 so far.

GMR Infrastructure reported a consolidated net loss of Rs 280.74 crore in Q3 December 2019 as compared to a net loss of Rs 561.04 crore in Q3 December 2018. Net sales in the December quarter rose 7.61% Y-o-Y to Rs 1,990.76 crore.

GMR Infrastructure is a leading global infrastructure conglomerate with interests in airport, energy, transportation and urban infrastructure.

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