GMR Infra settles arbitration with PE investors for 5.86% equity in GAL, Rs 3,560 cr cash payment

GMR Infrastructure Ltd (GIL) Monday said it has settled an ongoing arbitration with its private equity investors, including SBI Macquarie and Standard Chartered, giving them 5.86 per cent equity in GMR Airport Ltd (GAL) and a cash payment of Rs 3,560 crore.

Private equity (PE) investors - SBI Macquarie, Standard Chartered Private Equity, JM Financial Old Lane and others (investors) - had invested an amount of Rs 1,478 crore in the form of compulsorily convertible preference shares (CCPS) in GMR Airports Ltd (GAL) in FY2011 and FY2012.

Arbitration proceedings were administered by the Singapore International Arbitration Centre.

"Pursuant to the settlement agreement, all parties decided to withdraw the ongoing arbitration and pursuant to binding agreements giving effect to the terms of the settlement the investors would acquire 5.86 per cent equity of GAL at a 100 per cent valuation of Rs 21,000 crore and receive a payment of Rs 3,560 crore in lieu of their entire CCPS," GMR said in a BSE filing.

GMR said the cash payment would be partly funded by GIL through sale of its certain airport-related equity ownerships to GAL.

GIL will sell its entire shareholding of 40 per cent in CEBU airport in Philippines at a 100 per cent valuation of USD 590 million.

It will also sell its entire shareholding of 50 per cent in Clark EPC project in Philippines at a 100 per cent valuation of USD 9.7 million and its entire shareholding of 40.1 per cent in Delhi Airport Parking Services Ltd at a 100 per cent valuation of Rs 499 crore.

"The aforesaid shareholdings are being acquired by GAL based on valuations by Duff & Phelps. GAL would fund these acquisitions by a fresh issue of non-convertible debentures of Rs 2,005 crore subscribed by the investors and/or certain of their affiliates," the company said.

"We remain committed and bullish on the airport infrastructure business opportunities which encompasses growth of consumer business and commercial property business surrounding the airport," GBS Raju, Chairman, Airport Sector, GMR Group said.

Shares of GMR Infra were trading 1.56 per cent lower at Rs 15.75 apiece on BSE.