INFRA major GVK is acquiring Flughafen Zurich’s (also known as Unique) 12.2% stake in Bengaluru International Airport (BIAL) for Rs 485 crore. Unique, globally known as the operator of the Zurich airport, had a 17.2% stake in 18-month-old BIAL. In October this year, Zurich unveiled plans to divest a stake in BIAL, in which it holds a 74% stake along with Larsen & Toubro and Siemens.
GVK, which is already the largest shareholder in Mumbai International Airport, would be paying Rs 105 per share from its internal accruals to buy out Zurich’s stake. The transaction values BIAL at around Rs 4,000 crore.
Zurich will continue to hold 5%
“WE have the right of first refusal and are open to acquiring more stake as and when other investors seek an exit,” Sanjay Reddy, vice-chairman of GVK Industries & MD of Mumbai International Airport, said.
The deal was routed through GVK Airport Developers, which is a fully-owned subsidiary of GVK Power & Infrastructure, and also the shareholder in Mumbai International Airport. Standard Chartered Bank advised GVK on the transaction. Zurich will continue to hold a 5% stake and remain as the airport operator. At present, GVK will have the right to nominate one person on the BIAL board.
Simultaneously, the Hyderabad-based group has entered into an agreement with Zurich to jointly chase emerging opportunities in India’s airport development space. “Right now, our focus remains on India, and we will be working closely with Zurich in exploring possibilities. GVK is more focused on management while it (Zurich) has expertise as an operator,” Mr Reddy added.
The transaction will help GVK service over 30 million passengers annually. Mumbai International Airport Ltd (MIAL) accounts for 24 million passengers, while BIAL is geared to handle 9.8 million. A senior GVK official said BIAL was expected to post a small net profit on Rs 400-crore revenues this year.
This official, who did not wish to be named, also confirmed that GVK was in discussions with its partner Bidvest Group to buy out the latter’s 13.5% stake in MIAL. “We are in talks and hope to conclude the deal soon before the end of the current calendar year,” he said. Post the acquisition, GVK would have 50.5% in the Mumbai airport. On the bourses, GVK Power & Infrastructure closed 1.97% lower at Rs 47.25 with a record 54.72 lakh shares changing hands.
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