Infrastructure major GVK Ltd on Friday exited Bangalore airport by selling its residual 10 per cent equity stake in the Bangalore International Airport Ltd (BIAL) consortium to Canadian investment firm Fairfax for Rs 1,290 crore ($200 million).
"We have decided to part ways with BIAL as deleveraging is our top priority. The proceeds of this residual equity sale will be used to reduce our debt obligations after completing the transaction in July," said the Hyderabad-based GVK Power and Infrastructure Ltd.
GVK had sold 33 per cent of its 43 per cent stake in the consortium to Fairfax for Rs 2,202 crore ($336 million) on March 24.
"We entered BIAL in 2010 when the airport was going through a tough phase as the capacity was constrained. Over the last seven years, we worked hard to transform it into a world-class airport, which is ready for expansion, including a second runway and a new terminal," said GVK Chairman and Managing Director G.V.K. Reddy in a statement.
BIAL, which operates the Kempe Gowda International (KGI) airport at Devanahalli, 40 km from here, is a public-private consortium.
GVK's exit makes Fairfax's Mauritius-based subsidiary Fairfax India Holdings Corp the largest equity stakeholder in BIAL, with 48 per cent, followed by Siemens Project Ventures GmbH of Germany (26 per cent) and the central and state governments with 13 per cent each.
Flughafen Zurich AG of Switzerland also exited BIAL a year ago, sellintg its 5 per cent equity stake to Fairfax for $49 million (Rs 320 crore).
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"Notwithstanding our exit from BIAL, the airport sector will continue to be our focus area, especially Mumbai and Navi (new) Mumbai airports. The reduced debt burden gives us flexibility and management bandwidth to focus on these projects," said Reddy.
Capacity optimisation and real estate development will be GVK's thrust for the Mumbai airport.
"Having won the bid for the Navi Mumbai airport, we intend to deliver another world-class airport as the government's focus on developing the aviation sector presents growth opportunities for us," added Reddy.
The state-run Airport Authority of India (AAI) represents the central government and state-run Karnataka State Industrial Investment Development Corp (KSIIDC) represents the state government.
Fairfax financial holdings group is headed by Canadian investor Prem Watsa.
As the first PPP greenfield project, BIAL operates the country's third business airport under a 30+30 year concession agreement, with a capacity to handle about 20 million passengers per annum from one terminal.
As a leading commercial aviation operator, the GVK group also operates the Chhatrapati Shivaji international airport in Mumbai.
--IANS
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