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Andrew Harrison, CEO, GMR Male Airport, says that GMR did not go to Maldives for compensation. GMR entered Maldives to enhance terminal facilities, train Maldivian staff to increase skill level of staff and corporate through CSR initiatives.
We would fight for our rights all the way through the courts
Andrew Harrison, CEO, GMR Male Airport, says that GMR did not go to Maldives for compensation. GMR entered Maldives to enhance terminal facilities, train Maldivian staff to increase skill level of staff and corporate through CSR initiatives. We also made an important promise to the people and the government that concession revenues would increase on y-o-y basis.
Below is the edited transcript of his interview to CNBC-TV18.
Q: What is the situation with respect to Male Airport? We understand that the Singapore Court has issued a stay order, but there are quotes from Maldives defence minister that they will continue with the takeover of the airport from GMR as scheduled on 8th December ?
A: We have sought injunctive relief from Singapore High Court, because under the conditions of the concession agreement whilst we are subject to arbitration proceedings the respective parties should be permitted to perform their respective functions.
We were pleased to get the injunction order in our favour against the letter that has been issued by the ministry of finance and treasury in Maldives, giving us notice of take control of the airport after 7 day period. We had received separate notifications from the ministry of civil aviation that the 7 day period will expire at 23:59 hrs on 7th December.
With this news, we have advised our stakeholders and staff that arbitration is an ongoing process. It is not a process to find fault, it is a process to determine about the nature of the dispute and find a resolution. Naturally, the outcome of the arbitration will be binding on both parties. This injunctive order seeks to ensure that we can continue to operate with our full rights under the concession agreement without any interference.
Q: Are you amenable to compensation from the Maldives government? Are they offering some compensation to GMR? Would you be comfortable with the compensation and proceed in an amicable fashion and not go to the courts thereon?
A: We did not go to Maldives for compensation. We came because we responded to an internationally tended and competitive bid that was managed transparently and fairly by International Finance Corporation (IFC). We won the competitive bid and therefore came to Maldives with a development brief to construct and develop a brand new terminal which will be opened in summer 2014. We entered Maldives to enhance terminal facilities, train Maldivian staff to increase skill level of staff and corporate through CSR initiatives. We also made an important promise to the people and the government of Maldives that concession revenues would increase on y-o-y basis.
Q: Reuters quoted that, Maldives defence minister said that still they will continue with the takeover of the Male Airport and apparently their lawyers have advised them that the Singapore Court cannot order a sovereign government?
A: The concession agreement was signed by three parties, namely, Maldives Airport Company Limited as the grantor, second, government of Maldives through the ministry of finance as the guarantor. In addition to that there is another agreement know as the direct agreement which is a sovereign guarantee to our lenders, Axis Bank, that in the event that the agreement is either terminated early or voided then the banks interest and investment will be protected. So, there are many steps which are clearly defined in the concession agreement and the steps for termination are also clearly defined in the concession agreement.
The steps that the government has taken today are not following what is defined in that agreement. That was signed by a government and it was backed by a sovereign undertaking to our lenders. So, we expect that the same concession agreement which defines arbitration in the courts of Singapore for dispute resolution would be respected because it was signed by a government. Whether it is the present or earlier government.
GMR Infra stock price
On April 16, 2014, GMR Infrastructure closed at Rs 24.30, down Rs 0.95, or 3.76 percent. The 52-week high of the share was Rs 26.80 and the 52-week low was Rs 10.65.
The company's trailing 12-month (TTM) EPS was at Rs 0.07 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 347.14. The latest book value of the company is Rs 18.46 per share. At current value, the price-to-book value of the company is 1.32.
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