Indian company GMR Airports Holdings to be funded by Macquarie SBI Infrastructure Investment

Reports emerged Friday that GMR Airports Holding will receive up to $200 million, about Rs 930 crore, from Macquarie SBI Infrastructure Investment. GMR Airports Holding is the wholly owned subsidiary of GMR Infrastructure Ltd. In the deal, Macquarie SBI will invest the fund through compulsory convertible preference shares of GMR Airports holding, said the reports. As such, the preference shares will be converted into equity shares.

However, with regard to the price at the time of conversion, Macquarie SBI may be in a position to take about 39.1% stake in GMR Airports Holding, revealed the report further. Therefore, in terms of this investment funding transaction, GMR Airports will be valued at about Rs 2,400 crore. Currently, the company’s paid up capital is pegged at about Rs 340.9 crore and it owns a 9% stake in Delhi International Airport Ltd.

The report further said that GMR Airports Holding was keen on using the accrued funds from the deal for the acquisition of its parent’s (GMR Infrastructure Ltd) businesses in airports inclusive of the equity stake in Delhi International Airport Ltd and GMR Hyderabad International Airports. It now emerges from the reports that the two firms in the transaction are already in talks on a definitive agreement. As it is, reports indicate that GMR Airports has already contacted India’s foreign investments regulatory body, the Foreign Investment Promotion Board, to seek the necessary approvals.

Even so, GMR Airports’ spokesman confirmed that the company had gone into advance talks with Macquarie SBI for raising the estimated $200 million under the Airports holding company and that the government had already been notified for approvals.  Other than the planned stake acquisition in its parent’s businesses, GMR Airports will as well use the accrued funds for expansion in the airport sector, the reports said.

Macquarie SBI Infrastructure Management Limited is the manager of the Macquarie SBI Infrastructure Fund (MSIF), which provides institutional and other large-scale investors located outside India with access to the growing number of investment opportunities available to the private sector in India’s infrastructure and infrastructure-like assets.

GMR Group is a Bangalore headquartered global infrastructure major with interests in the Airports, Energy, Highways and Urban infrastructure. In addition to these, Agri-business is another area of focus for the Group, with Sugar as its main product line. Its two Subsidiary Companies, GMR Infrastructure Limited and GMR Industries Limited are listed on Indian Stock Exchanges.

6 Aug 2010