GVK Power buys 12% stake in Bangalore Airport for Rs485cr

Published on Thu, Nov 05, 2009 at 15:18 |  Source : CNBC-TV18

Updated at Thu, Nov 05, 2009 at 16:48  

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GVK Reddy, Chairman, GVK Power & Infrastructure

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GVK Power and Infrastructure  has bought a 12% stake in Bangalore International Airport for Rs 48.6 crore. The stake buy is from Flughafen Zuerich AG, the company said, adding that the airport would make Rs 30-40 crore profit.

In an interview to CNBC-TV18, GVK Reddy, Chairman of GVK Power & Infrastructure, spoke about the latest happenings in his company.

Below is a verbatim transcript of an exclusive interview with GVK Reddy on CNBC-TV18. Also watch the accompanying video.

Q: What kind of stake have you picked up and at what price?

A: The stake is from Zurich's Unique Airport which is operating the Bangalore Airport. They have offered us a 12% stake out of 17% that they hold. Other shareholders have not picked up the stake which is first right of refusal. We have entered into an agreement with them. On November 4, we have signed an agreement to takeover this 12% from Unique Airport. Our board has also approved this. They have offered it at Rs 105 and we are agreed to take it over.

Q: What is the total payout cost for GVK in order to acquire this 12% stake?

A: We have to pay them about Rs 480-485 crore.

Q: Is there an option to increase your stake further? You have indicated that Zurich Airport hold 17%, which means they still have a residual 5%?

A: The option is there but the moment we get in there, all the stakeholders who want to sell, they want to give a first right of refusal to other stakeholders. So when they give an offer to other stakeholders, whoever is interested can take over. Larsen & Toubro (L&T) has already offered their 7% stake to others.

Q: What does this take your total stake to in the Bangalore Airport?

A: Out of 100%, 26% is owned by the government. The breakup is - 13% by the state government and 13% by the airport authority. Siemens own 40%, L&T owns 17% and Zurich Airport owns 17%. They have a lock-in of 5% for five years. They cannot sell the remaining 5% for the five year.

Q: Can you give us a sense of what kind of revenue potential there is for GVK Power with this acquisition of 12% stake? What kind of footfalls, revenue has the Bangalore airport been generating on a quarterly basis?

A: I cannot answer that immediately because I have to check the numbers.

Q: It is currently a profit making entity?

A: It is likely that they are going to make about Rs 30-40 crore profit this year and maybe next year. I cannot tell you the correct number unless we run through the H1 financials.

  

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