GVK Power and Infrastructure Ltd has decided to sell its residual 10 per cent stake in Bangalore International Airport Limited to Fairfax India Holdings Corporation for Rs. 1,290 crore (approximately $200 million).
The transaction is expected to be completed by early July 2017. The proceeds of this sale are to be used for further reducing the debt obligations of GVK.
The company sold its stake held through its subsidiary, Bangalore Airport Infrastructure Developers Private Limited.
GVK Reddy, Founder Chairman and Managing Director of GVK, said, “Notwithstanding this sale, the airports sector will continue to be a core focus area for GVK. We had entered BIAL in 2010 when the airport was going through a tough phase as the capacity was severely constrained. Over the last seven years, we have worked very hard to transform BIAL into a world-class airport.”
“The airport is now ready for another phase of expansion with a new runway and a new terminal to be constructed. However, we have decided to part ways with BIAL as deleveraging is top priority.”
“Our immediate focus will now be on Mumbai and Navi Mumbai airports and on selectively evaluating privatisation opportunities. The reduced debt burden gives us flexibility and releases management bandwidth to focus on these projects,” he said.
“Capacity optimisation and real estate development will be the key focus areas for the existing Mumbai airport. Having won the bid for the Navi Mumbai airport, we are excited to deliver yet another world-class airport. The Government’s focus on developing the aviation sector also presents attractive growth opportunities and we are evaluating these,” Reddy further said