GMR Group to divest 40% stake in Philippines’ Mactan Cebu airport for Rs 1,350 crore

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HYDERABAD: GMR Group on Friday said it has entered into definitive agreements with Aboitiz InfraCapital Inc (AIC) for divesting its 40% stake in the Mactan Cebu International Airport (MCIA) in Philippines for a total consideration of around Rs 1,350 crore.
Though GMR Group will be exiting the Philippines airport project by October 30, 2024, it will continue to operate as the technical services provider to GMR-Megawide Cebu Airport Corporation (GMCAC), a joint venture between GMR Airports International BV (GAIBV) and Megawide Construction Corporation (MCC), till December 2026.
GMR Group will hence also be entitled to additional deferred consideration based on the subsequent performance of GMCAC for the same period, it said.
As part of the deal, GAIBV, a stepdown subsidiary of GMR Infrastructure Limited (GIL) and a direct subsidiary of GMR Airports Ltd (GAL), will divest its stake in GMCAC, the joint venture developer and operator of MCIA, Philippines.
The divestment is part of GMR Group’s efforts to reduce GAL’s debt and rebalance its airports portfolio to focus on high growth opportunities.
“In the last 8 years, we have completed the expansion plan and have been one of fastest growing airports in the region which led to steady returns. The decision to divest our stake in GMCAC is also in line with GMR Airport’s strategy to focus on deleveraging and redeploying capital in high growth opportunities, ”Srinivas Bommidala, business chairman – international airports, GMR Group, said.
Elaborating on the deal, which is subject to customary regulatory approvals in Philippines, GMR Group said both GAIBV and MCC will sell down their existing stakes in GMCAC to accommodate AIC’s entry.
The deal involves GMCAC issuing primary shares as well as the transfer of secondary shares from Megawide and GAIBV to AIC aggregating (Philippine Peso) PhP 9.5 billion, which will result in AIC owning 33.33% minus 1 share stake in GMCAC.
Simultaneously, Megawide and GAIBV will issue exchangeable notes for PhP 7.75 billion each aggregating to PhP 15.5 billion. The notes will mature on October 30, 2024, and will be exchanged by AIC for the remaining 66.6% plus 1 share of GMCAC’s outstanding capital stock.
The transaction will be undertaken at an enterprise value of PhP 49.7 bn (approx. Rs 7000 crore) and GAIBV will receive an upfront amount of PhP 9.4 bn (approx. Rs 1350 crore) in lieu of the shares being transferred and notes being issued, GMR said.



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