France's Groupe ADP to buy 49 pc stake in GMR airport biz for Rs 10,780 cr

GMR Infrastructure on Thursday announced that France's Groupe ADP will acquire 49 per cent stake in its airport business for Rs 10,780 crore, a move that will help the group reduce debt burden.

"The first tranche of Rs 5,248 crore will be received by GMR Group immediately. This money will help deleverage the group further and result in improved cash flows and profitability," the group said in a statement.

Under a share purchase agreement, Groupe ADP would have 49 per cent stake in GMR Airports Ltd (GAL) for an equity consideration of Rs 10,780 crore. This values GAL at the base post money valuation of Rs 22,000 crore.

Out of the total amount, Rs 9,780 crore would be towards secondary sale of shares by GMR group and Rs 1,000 crore would be equity infusion in GAL, as per the statement.

"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 & its key subsidiaries," it said.

Citing 2019 passenger statistics, the statement said the combined passengers handled by GMR Airports and Groupe ADP stands at 336.5 million, "the highest across the world".

GMR Group operates Indira Gandhi International Airport in New Delhi, Hyderabad's Rajiv Gandhi International Airport and Mactan Cebu International Airport in partnership with Megawide in Philippines.

Groupe ADP develops and manages airports, including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget.

"The partnership with Groupe ADP is in line with GMR's business direction to become a global airport developer and operator... With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth," GMR Group Chairman G M Rao said.

Augustin de Romanet Chairman and CEO of Aroports de Paris SA-Groupe ADP said the acquisition of 49 per cent stake in GAL fits within Groupe ADP's strategy.

"Groupe ADP has also pegged earn-outs up to Rs 4,475 crore linked to achievement of certain agreed operating performance metrics as well as on receipt of certain regulatory clarifications over next five years.

"Thereby, total valuation assuming all above earn-outs are successfully consummated, may reach Rs 26,475 crore on post money basis," the statement said.

Airports at Mopa in Goa and at Heraklion, Crete, Greece in partnership with GEK Terna, are under development by GMR Group.