HYDERABAD: In a significant move, GMR Infrastructure Ltd signed a pact with France-based Groupe ADP to sell 49 per cent of stake in its airports business GMR Airports Ltd (GAL) for an equity consideration of Rs 10,780 crore.
The deal includes Rs 9,780 crore towards secondary sale of shares by GMR and Rs 1,000 crore equity infusion in the airports business.
The GMR would receive the first tranche of Rs 5,248 crore immediately, which would help it improve cash flows and profitability.
As part of the terms of the transaction, the GMR would retain the management control over the airports business with Groupe ADP getting customary rights and board representation at GAL and its key subsidiaries.
The deal values GAL at about Rs 22,000 crore. Besides, Groupe ADP has also pegged earn-outs up to Rs 4,475 crore linked to the achievement of certain agreed operating performance metrics as well as on receipt of certain regulatory clarifications over the next five years.
Therefore, the total valuation assuming earn-outs are successfully consummated may reach Rs 26,475 crore on post-money basis, the company said in a statement.
As per 2019 passenger statistics, the combined passengers handled by the GMR Airports and Groupe ADP stands at 336.5 million, the highest across the world.
Together, the GMR and the Groupe ADP would join forces in airport development and operations to offer superior experience to passengers.
Importantly, it would open up opportunities for route development, enhanced expertise in operations, retail, IT and innovation.
“The partnership with Groupe ADP is in line with the GMR’s business direction to become a global airport developer and operator. We have been on a journey of defining airports of the future with key focus on passenger experience by leveraging enhanced technology and offering superior amenities,” said GM Rao, chairman of GMR Group.
According to Augustin de Romanet, chairman & CEO of Aéroports de Paris SA-Groupe ADP, the acquisition fits within the Groupe ADP’s strategy.
“It sets a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports, a unique worldwide network of airports,” he said.