New Delhi GMR Airports International BV and its Philippines-based joint venture partner Megawide Construction Corp will sell their entire stake in Mactan Cebu International Airport, GMR Group said on Friday.
This will help GMR Airports to reduce debt and rebalance its portfolio for higher return on investment.
GMR Group holds 40% stake in the airport, while 60% is owned by Megawide Construction.
GMR Airports International, a division of GMR Infrastructure, and Megawide have entered into an agreement with Abbott’s Infracapital to sell their stake. Aboitiz InfraCapital is the infrastructure arm of the Philppines’ Aboitiz Group, which operates and develops economic wealth, water facilities, digital infrastructure, transportation and mobility projects.
As per the agreement, GMR Airports and Megawide will issue secondary shares of 9.5 billion Philippine pesos (approximately). 1,330 crore) to Aboitiz InfraCapital.
“As a result, Abeotiz Infracapital will hold 33.33 percent minus one share stake in the airport. Simultaneously, both the partners in the joint venture will also issue exchangeable notes denomination of 7.75 billion Philippine pesos. 1,086 crore), each totaling 15.5 billion Philippine pesos (approx. 2,173 crore). The notes will mature on 30 October 2024 and will be exchanged for the remaining 66.66% by Aboitis and a portion of the airport.”
The transaction is being carried out at enterprise value 7,050 crore, and GMR Airports International will receive an advance of Rs. 1,330 crore in exchange for shares and exchangeable notes. The transaction will be subject to regulatory approval in the Philippines.
The company said GMR Airports will continue to provide its technical services to the airport until December 2026 and will be entitled to any additional deferred consideration based on the airport’s subsequent performance during this period.
GMR Group Business Chairman – International Airports Srinivas Bommidala said, “The decision to sell its stake in GMCAC (GMR-Megawide Cebu Airport) is also in line with GMR Airports strategy.
Mactan Cebu International Airport is the second busiest airport in the Philippines after Ninoy Aquino International Airport in Manila.
GMR-Megawide Cebu Airport Corporation took over the operations of the airport in November 2014 to construct, develop, renovate and expand the facility over a period of 25 years.
GMR Airport is currently the largest private airport operator in Asia and the second largest in the world, with an annual operating capacity of over 189 million.
In India, GMR Group operates airports in Delhi and Hyderabad. It is also developing airports at Bhogapuram and Goa. It is developing Crete Airport in Greece and Kuala Namu Airport in Indonesia in collaboration with Angkasa Pura II. Shares of GMR Infrastructure climbed 2.99 per cent on Friday 39.55 on BSE.
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