GVK Power & Infrastructure raising ₹7,614 cr

Move expected to help it retire debt, ringfence its holding in Mumbai airport

GVK Power & Infrastructure (GVKPIL) is raising ₹7,614 crore from a clutch of investors to primarily retire debt obligations of its holding companies significantly and fund the purchase of additional stake in Mumbai International Airport Ltd (MIAL).

Sunday’s announcement on the proposed transaction comes in the backdrop of the Adani Group, earlier this year, eyeing a stake in MIAL.

A statement from GVKPIL said its subsidiaries, GVK Airport Developers (GVKADL) and GVK Airport Holdings (GVKAHL), have entered into definitive agreements with subsidiaries of the Abu Dhabi Investment Authority (ADIA), Public Sector Pension Investment Board (PSP Investments) supported by its global airports platform, AviAlliance, and with National Investment & Infrastructure Fund (NIIF). The investors will make an aggregate investment of ₹7,614 crore into GVKAHL. The holding company of MIAL, GVKAHL is engaged in the business of developing, operating and managing the Chhatrapati Shivaji Maharaj International Airport and development of Navi Mumbai International Airport through a subsidiary — Navi Mumbai International Airport (NMIAL).

Closing conditions

The proceeds will be used to primarily retire debt obligations of its holding companies significantly and fund purchase of additional shares in MIAL by GVKAHL — from Bidvest and ACSA that together hold 23.5% stake in MIAL, in accordance with the Right of First Offer already exercised by GVKAHL.

The closure of the transaction will be subject to satisfactory completion of closing conditions, including regulatory/third party approvals and lender consents. On completion, GVKAHL will have four shareholders — GVKADL, ADIA, PSP Investments and NIIF. GVKADL, upon completion, will hold 20.9% in GVKAHL and the balance will be equally shared between the investor.

Provide impetus

Welcoming ADIA, PSP Investments and NIIF as shareholders in GVKAHL, GVK founder and chairman GVK Reddy said: “together, we will continue with our endeavours to create world-class infrastructure and a strong aviation hub that will provide the impetus for growth and development of Mumbai and India. We will now accelerate our efforts for developing the Navi Mumbai International Airport, monetising MIAL’s real estate assets and building an even stronger airports business.”

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