GMR receives Rs 3,215-crore term loan for Vizag International Airport

A consortium of five lenders sanctioned a term loan of Rs 3,215 crore to the GMR Visakhapatnam International Airport, with the aim of helping GMR Group build its fourth airport in India.

The GMR Airports currently operates New Delhi's Indira Gandhi International Airport, the Rajiv Gandhi International Airport in Hyderabad, and the Manohar International Airport in Goa, and an airport each in the Philippines and Indonesia.

Sources said that among the five lenders, REC has sanctioned the highest amount of Rs 1,245 crore, followed by India Infrastructure Finance Company (Rs 860 crore), and Exim Bank (Rs 455 crore). The other two members in the consortium of five lenders are the Central Bank of India, which has sanctioned Rs 364 crore, and the Bank of Maharashtra, which has sanctioned Rs 291 crore.

Estimated to be around Rs 4,727 crore, the project cost would be funded by Rs 3,215 crore debt, equity and equity-linked instruments of Rs 1,377 crore, and a grant of Rs 135 crore by the Andhra Pradesh government.

The loan has an 18-year tenure, which includes the first three years of the construction period and one year of the moratorium. A source said, "It is priced at a weighted average rate, ranging from 10 per cent to 10.5 per cent."

Once the airport is operational, the GMR will open an escrow account with lenders through which they will control the airport development fee. The financial closure happened within days of global fund GQG Partners acquiring a 4.7 per cent stake in the holding company, GMR Airports, for Rs 1,672 crore.

GMR Group, founded by Grandhi Mallikarjuna Rao, entered the airport's development space in 2003, through the subsidiary GMR Airports Limited. Outside India, it operates the Mactan Cebu International Airport in the Philippines and the New Heraklion International Airport in Greece. The company also announced that it will develop and transform Nagpur Airport into a world-class aviation hub, replicating its successful upgrade efforts in the Delhi Airport in India and the Cebu-Mactan in the Philippines.