GMR Infra is planning to seek compensation of over USD 800 million from the Maldives government after it was forced to hand over Male airport to the latter, states a report in the Economic Times.
GMR Infra is in discussion with lawyers to sue Maldives government for cancelling Male Airport contract. It is also planning to seek compensation of over USD 800 million after it was forced to hand over Male Airport to the latter, states a report in the Economic Times.
The report further states that GMR 'feels cheated' after making an investment of USD 511 million in the project only to know later that the contract will be cancelled over an illegal component- airport development charge (ADC) present in it, which they were not aware of.
According to the report, GMR will discuss about the compensation package with its lawyers first and only then it will work out a legal strategy. Meanwhile, shares of the company were up over a percent to Rs 18.85.
GMR and Malaysia Airports Holdings Berhad won the contract in November 2010 to modernise and run the Male airport for 25 years, with Singapore as the jurisdiction in the event of disputes. GMR's was the biggest foreign investment in Maldives.
However, GMR's decision to impose an airport development charge (ADC) of $25 per departing passenger became a bone of contention between the company and the government, especially with a regime change in Maldives in February.
The finances of the deal went askew when a local court struck down the provision for the airport development charge, terming it illegal, though the provision for the charge was there in the contract.
GMR Infra stock price
On August 28, 2015, GMR Infrastructure closed at Rs 11.63, down Rs 0.6, or 4.91 percent. The 52-week high of the share was Rs 26.66 and the 52-week low was Rs 9.82.
The latest book value of the company is Rs 15.47 per share. At current value, the price-to-book value of the company was 0.75.
READ MORE ON GMR Infra, Male Airport, Maldives, USD800mn, airport development charge, USD 511 million, Malaysia Airports Holdings Berhad
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