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GMR Airports plans to raise $100 mn to buy parent's stake

Raghuvir Badrinath & Debasis Mohapatra  |  Bangalore 

GMR Airports Holding Ltd plans to raise around $100 million (Rs 465 crore) to buy out the holdings of its parent, GMR Infrastructure, in the airports business.

Earlier, the company had entered into an agreement with Macquarie SBI Investment (MSIIL) to raise close to $200 million (Rs 930 crore) by way of compulsorily convertible preference shares.

“GMR will raise close to $100 million, in addition to the $200 million raised by the company, to increase its holding in the airport business,” an industry official told Business Standard. Infrastructure financing company IDFC is among those interested, he added.

GMR's airport business comprises one each at Delhi and Hyderabad and two abroad, one in Istanbul, Turkey, and the recently-won contract for Male International Airport (Maldives).

A Subba Rao, Group CFO, had recently gone on record detailing that GMR "will certainly consider if the stakeholders come forward with an offer. If a minority partner wants to sell its stake, naturally we have the first opportunity to buy," he had said.

Malaysia Airports Holdings Berhad is the minority partner, with 11 per cent and 10 per cent stakes in the Hyderabad and New Delhi airport, respectively. Fraport, the German airport developer, holds 10 per cent stake in the New Delhi airport. Malaysian Airports Holding is a minority partner in Istanbul airport, with 20 per cent stake.

In the airport segment, the company registered revenue of Rs 425 crore during the April-June period. While the company received revenue of Rs 265 crore from Delhi International Airport, it had revenue of Rs 122 crore from its Hyderabad operation during the first quarter of this financial year.

“Male airport, with a project cost of $400 million, will have a debt to equity ratio of 75:25 and is expected to achieve financial closure by September,” a top company executive said.

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First Published: Tue, August 10 2010. 00:55 IST