INDIA BUSINESS WORLD - DECEMBER 1st - DECEMBER 15th
- 2007
BANKS, FIS BUY 9% IN GMR INFRA FOR $1 B
A clutch of domestic banks and foreign financial investors has picked up around 9% stake in GMR Infrastructure, the flagship company of GMR Group, for around $1 billion, through a qualified institutional placement (QIP), the largest among such recent deals.
The investors include State Bank of India (SBI), Canara Bank, Capital International, Citigroup, T Rowe Price, Credit Agricole, UBS and Kotak Mahindra. The deal involves selling part-stake by promoters and issuing fresh shares. Post-issue, the promoters' holding will fall to 74% with the remaining 26% stake to be held by the public and new investors together.
Sources close to the deal said SBI and Canara Bank are the largest investors in the QIP, investing Rs 500 crore ($126 million) each in the issue. Other investors have invested between $40-70 million. GMR Infrastructure CFO Madhu Terdal said the funds would be used for the construction of GMR Istanbul's airport in Turkey as well as buyouts in the international power and airport markets. Currently, GMR is bidding for Tuas Power in Singapore.
Aviation industry sources said the group is looking at opportunities to bid for airport projects in Africa and eastern Europe. Earlier this year, the GMR consortium bid $2.7 billion for the Istanbul project, which will be funded through a debt-equity ratio of 80:20. GMR's contribution to the equity is much smaller and works out to around $43 million. This amount will be raised through internal accruals. Citigroup Global Markets, JM Financial, JP Morgan, Kotak Mahindra Capital Company, Lehman Brothers and UBS acted as joint book-running managers for the QIP issue.
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