GMR Infra has raised Rs 2,000 crore debt through non-convertible debentures from Tata Sons and Singaporean wealth fund GIC to retire earlier loans.
“We can confirm that GMR has raised Rs 2,000 crore through NCDs. This has been done to retire certain existing loans,” said a GMR spokesperson, without elaborating on specifics. Emails to the Tata group and GIC remained unanswered before the story went to press.
More than a dozen lenders — including US private equity giant KKR’s NBFC arm, Yes Bank, Srei Infrastructure, HDFC, L&T and Piramal Group — have either given loans or subscribed to non-convertible debentures (NCD) of the GMR group, ET reported in April last year. Lenders hold GMR Infra shares as collateral in some cases.
GMR has been looking at various options to pare its over Rs 20,000 crore debt. Last year, Tata-GIC and Hong Kong-based SSG signed a pact with the conglomerate invest Rs 8,500 crore in its airport business for a 45% stake.
The move hit a hurdle last year due to a rule which prohibited the purchase of more than 10% stake in any airport by a firm that already owns an airline.
Tata Sons owns close to half in two Indian carriers Vistara and AirAsia and the proposed 20% stake in GMR’s airports business would give it a 12.8% stake in the Delhi International Airport Ltd (DIAL), the consortium that runs Delhi airport. GMR Infra, through GMR Airports, owns 64% in DIAL.
People in the know said the Tatas later agreed to taper the shareholding in GMR Airports to 15% which will bring its shareholding in DIAL to below 10%. GIC which was earlier supposed to pick up 15% plans to now take 20% while SSG will pick up 10% as planned earlier.
Last October, India’s competition watchdog gave its approval to the deal. GMR is waiting for the civil aviation ministry’s approval to the deal.
“Regarding investments coming into GMR Airports, we are expecting requisite approvals from the regulatory authorities soon,” the GMR spokesperson added.
The planned deal values GMR Airports at close to Rs 18,000 crore. Added to ‘earnouts’ of up to Rs 4,475 crore over the next five years, it will take the total value of the firm to Rs 22,480 crore after the stake sale is consummated.
Earnouts are in the nature of estimated earnings based on certain performance milestones agreed upon between the management and investors. These milestones include performance of its duty-free business, commercial real estate, etc. that the company can achieve over the next five years.
The Tata-led consortium’s proposal will include Rs 1,000 crore in fresh equity in GMR Airports. The rest will be towards the purchase of stake from GMR Infra and its subsidiaries. GMR Infra’s stake will come down to about 54% while an employee welfare trust will hold the rest. A GMR spokesperson said earlier that while the enabling provision is for 55.2%, the intent is to sell about 45%.
GMR runs India’s busiest airport in Delhi and fourth busiest in Hyderabad. It is building a new airport in Goa. It has received a letter of intent for development and operations of Nagpur airport and has emerged as the highest bidder for developing and operating an airport in Bhogapuram, Andhra Pradesh. It operates the Mactan-Cebu International Airport in the Philippines and is building a new airport in Crete island, Greece.
Source: Economic Times