GVK Power & Infrastructure Ltd. (GVKPIL), through two subsidiaries, has entered into an agreement for selling 49% stake in its airports holding company to Abu Dhabi Investment Authority (ADIA) and the National Investment & Infrastructure Fund (NIIF).
GVK Airport Developers Ltd. and GVK Airport Holdings Ltd. (GVKAHL) have signed a term sheet and exclusivity agreement with ADIA and NIIF for an investment in new shares in GVKAHL equating to a 49% stake, a statement said.
The agreement is part of a process initiated by GVK to identify and select preferred investors to raise capital to reduce or refinance debt of up to ₹5,750 crore, the release said.
The proposed transaction assumes significance in the backdrop of Adani Group, earlier this year, reportedly expressing interest to acquire about 23% stake in the Mumbai International Airport Ltd. (MIAL). GVK holds 50.5% in MIAL. It had also initiated the process of acquiring 23.5% stake held by South Africa’s ACSA and Bidvest, which, on completion would take GVK shareholding to 74%. Airports Authority of India holds the remaining 26% in MIAL.
GVK has also bagged the contract to develop a new airport in Navi Mumbai.
GVK Chairman G.V. Krishna Reddy said the funds brought in through the proposed transaction would help in deleveraging. The future focus will be on delivering Navi Mumbai International Airport, successfully monetising Mumbai airport’s real estate and building a strong airports business at GVK.
The transaction is subject to conclusion of confirmatory due diligence by ADIA and NIIF, agreement on definitive documents and customary closing conditions.
