After over a week-long legal battle, Indian infrastructure major GMR will hand over the operations of the Male International Airport to Maldives's state-run MACL tonight with the expiry of the deadline for the same.
After over a week-long legal battle, Indian infrastructure major GMR will hand over the operations of the Male International Airport to Maldives's state-run MACL tonight with the expiry of the deadline for the same. Terminating the USD 511 million contract with GMR on November 27, Maldivian governemnt had given time till tonight to the Bangalore-based firm to handover the operations of the Ibrahim Nassir International Airport to Maldives Airport Company Limited (MACL).
The handover will take place a day after the Singapore Supreme Court ruled that Maldives government has the "power to do what its wants including expropriating the airport", dealing a severe blow to GMR which had earlier got a temprorary repreive with the Singapore High Court staying the termination. "In deference to the orders of the Court of Appeals, Singapore, GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nassir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight," GMR said in a statement.
The contentious issue saw various twists and turns both on legal and diplomatic fronts with India expressing its strong displeasure over the "unilateral" decision of termination and had conveyed that the move will have an adverse impact on the bilateral ties. "GMIAL has been assured that as a result of this takeover all its employees, suppliers and other interested parties will not be put to any inconvenience.
"GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010," the company statement said. It added, "All actions as above are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up".
In 2010, GMR-led consortium won the right to build and operate the Ibrahim Nasir International Airport (INIA) for 25 years, which is extendable by another 10 years. The deal was signed during the regime of previous government headed by Mohamed Nasheed. But after the regime change in February, GMR had been facing an uphill task. The current government in Male headed by President Mohamed Waheed says the contract was signed under "dubious" conditions and was "void", a charge hotly denied by the Indian firm.
A number of anti-GMR rallies were organised in Male by certain right-wing coalition partners of the current regime. Anti-Indian statements also seeped into the protests that were held in the Indian ocean archipelago. The Male airport venture has been the most profitable for GMR in terms of its airports business segment. The company has so far invested about USD 250 million on managing and upgrading the facilities at the Male airport.
The bone of contention between GMR and Maldivian government is levy of an Airport Development Charge (ADC) of USD 25 per passenger and USD 2 per passenger insurance surcharge. The levy was supposed to be charged from January 1 this year but a local civil court had struck down the proposal in December last year.
After that, the then government headed by Nasheed agreed to compensate GMR against the levy. However, the decision was reversed by the new regime early this year, leading to GMR filing for arbitration in a Singapore court. GMR claims that it has dues of over USD 3 million on the Maldivian government.
GMR Infra stock price
On November 26, 2014, at 09:49 hrs GMR Infrastructure was quoting at Rs 20.35, up Rs 0.20, or 0.99 percent. The 52-week high of the share was Rs 38.30 and the 52-week low was Rs 17.20.
The company's trailing 12-month (TTM) EPS was at Rs 0.23 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 88.48. The latest book value of the company is Rs 16.76 per share. At current value, the price-to-book value of the company is 1.21.
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