GMR may sell 49% stake in Hyderabad Airport to Abu Dhabi Investment Authority
GMR Infrastructure is expected to sell up to 49% stake in Hyderabad International Airport to Abu Dhabi Investment Authority (ADIA). The company is in its advance stage of its negotiations with ADIA and the deal could soon be materialized. GMR is looking to sell its non-core assets to lighten its debt burden and plans to monetize the airport portfolio, deleverage its balance sheet and provide an exit to existing investors. If the transaction goes ahead, the airport entity will be valued at Rs. 5,000 crore.
GMR Infrastructure has a diversified business in airport, energy, highways and urban infrastructure sector. The company’s debt significantly came down to Rs. 19,856 crore in FY17 from Rs. 37,480 in FY16. In FY17, the airport division’s profit after tax rose 423% to Rs. 869 crore. Traffic at GMR airports crossed 82 million passengers, up 19%. Hyderabad airport’s traffic increased to 15.2 million from 12.5 million. GMR holds a 64% stake in Delhi International Airport Ltd (DIAL) and 63% in GMR Hyderabad International Airport Ltd (GHIAL). It also owns 40% of the Mactan-Cebu International Airport project in the Philippines.
ADIA is one of the most aggressive sovereign funds in India and has invested in a few airports globally, including those at Gatwick and Rome. Headquartered in Abu Dhabi, ADIA’s total assets under management are estimated at $792 billion, according to the US based Sovereign Wealth Fund Institute. ADIA has significant India exposure through direct and indirect investments in various asset classes including private equity funds, real estate and direct transactions on income-generating assets.