ETW Staff – Mumbai
GVK Power & Infrastructure Limited has announced that it will divest 33 per cent stake in Bangalore International Airport Limited (BIAL) to Fairfax India Holdings Corporation and Fairfax Financial Holdings Limited, through their wholly-owned subsidiaries in Mauritius, for an aggregate investment of INR 21.49 billion (INR 2149 crore). Upon completion of this transaction, there would be a reduction of debt burden of around INR 2,000 crore and would also result in saving of interest cost to the extent of approximately INR 300 crore per annum. The transaction is subject to customary closing conditions and third party consents, including lender consents, and is expected to be completed by the middle of 2016.
GVK Airport Developers, a wholly owned subsidiary of GVK Power & Infrastructure, had initiated a financing process last year to reduce its debt obligations to its lenders. The infrastructure major received multiple offers, from which the Fairfax Group was selected.
Dr. GVK Reddy, founder chairman and MD, GVK commenting on this development said, “This is an important and successful milestone in deleveraging our balance sheet, and all proceeds from this stake sale shall be used to bring down our debt obligations to our lenders. We chose Fairfax as a partner in BIAL as we have a long standing relationship with its Chairman, Mr. Prem Watsa and we would look forward to partnering with them in developing Kempegowda International Airport through its next stage of expansion as we develop a new world-class Terminal 2 and a new runway.”