GVK exits Bengaluru airport, sells residual 10% stake to Fairfax
The Hyderabad-based GVK Group is present in energy, airports, transportation, hospitality and life sciences. The group set up the country's first independent power plant is also the first company to develop a six-lane road project under the PPP model.
GVK Power & Infrastructure on Thursday exited the Bengaluru airport by selling its residual 10 percent stake to Canadian NRI businessman Prem Watsa's Fairfax India Holdings Corporation for Rs 1,290 crore.
Now Watsa owns 48 percent in the third busiest airport in the country and GVK, which built the greenfield project, exits the airport.
The remaining stake is held by Siemens Project Ventures with 26 percent and the Airport Authority and Karnataka State Industrial and Infrastructure Development Corporation hold 13 percent each.
On March 24, 2017, the billionaire businessman increased his stake in the airport by 5 percent by picking it up from Flughafen Zurich AG, taking his total holding to 38 percent.
In March this year, GVK had closed an agreement signed in March 2016 with Fairfax India to sell a 33 percent stake in the Kempegowda International Airport for Rs 2,202 crore, but retained a 10 percent stake and management control.
Subsequently, in June this year, GVK announced its decision to conclude the sale of this 10 per cent residual stake to Fairfax India.
GVK build the airport under a 30+30 year concession agreement from the government.
In March 2016, the airport was valued at valuing the eight-year-old airport at about Rs 6,500 crore.
Commenting on the development, GVK Group founder chairman & managing director GVK Reddy said, "since deleveraging is currently our top priority, we decided to part ways with the Bengaluru airport. However, we would like to reiterate that the airports sector will continue to be a core focus area for GVK."
The Bengaluru airport is Fairfax Group's largest investment in the country since it opened an India-dedicated investment company in 2014. It is also the company's biggest bet on the country's infrastructure sector.
"We will now focus on Mumbai as well as the Navi Mumbai airport for which we have won the bid and also on selectively evaluating privatisation opportunities. Capacity optimisation and real estate development will now be the priority areas for the existing Mumbai airport," he added. The move comes as it struggles to pay back Rs 22,000 crore of debt on its books.The Hyderabad-based GVK Group is present in energy, airports, transportation, hospitality and life sciences. The group set up the country's first independent power plant is also the first company to develop a six-lane road project under the PPP model.