MUMBAI: GVK Power & Infrastructure on Friday said it has sold its residual 10% stake in Bangalore International Airport to Fairfax India Holdings for Rs 1,290 crore. The move will help it reduce “debt burden” and focus on Mumbai and Navi Mumbai airports, it said.
The transaction is slated to be completed in July, after which GVK co-chairman GVK Reddy and managing director Sanjay Reddy will resign from the airport’s board and management, a person close to the development said, requesting anonymity.
On March 24, GVK had sold 33% in the airport to Fairfax, the Indian unit of billionaire Prem Watsa's investment company, for Rs 2,202 crore. Fairfax has also bought another 5% in the airport company from Flughafen Zurich AG, taking its holding to 38%. The latest deal takes its total ownership in India's third-busiest airport to 48%.
“Notwithstanding this sale, the airports sector will continue to be a core focus area for GVK,” said GVK Reddy in a statement.
“Our immediate focus will now be on Mumbai and Navi Mumbai airports, and on selectively evaluating privatisation opportunities. The reduced debt burden gives us flexibility and releases management bandwidth to focus on these projects.”
The proceeds of this sale are to be used for further reducing the debt obligations of GVK, the company said.
GVK’s net adjusted profit for the year ended March 31, 2016 is Rs 438.23 crore as against Rs 74.98 crore for the previous year, an increase of 484.46%. The company had a consolidated debt of over Rs 32,000 crore as of March 31, 2017.
GVK had bought 12% in the airport company from Zurich Airport in November 2009 and followed it with a 17% stake buy from Larsen and Toubro. In 2012, it increased its stake to 43%, buying shares from Siemens Project Ventures GmbH.