New Delhi: GVK Power and Infrastructure will sell 33 per cent of its stake in Bangalore International Airport Ltd (BIAL) to Fairfax India for Rs 2,149 crore, a deal that will trim the group’s debt burden.
The transaction, which is expected to be completed by mid-2016, would also help the diversified entity save around Rs 300 crore annually on interest costs.
Bangalore International Airport Ltd (BIAL) owns and operates the Kempeg-owda International Airport in Bengaluru. The airport started operations in May 2008.
In BIAL, GVK Group currently holds 43 per cent stake, Siemens Project Ventures GmbH 26 per cent and Flughafen Zurich AG five per cent while state-owned entities Airport Authority of India and Karnataka State Industrial Investment & Development Corporation hold 13 per cent each.
“Upon completion of this transaction, there would be a reduction of debt burden of around Rs 2,000 crore and would also result in savings of interest costs to the extent of Rs 300 crore per annum,” the company said in a release. Grappling with debt burden, GVK Power had been exploring avenues, including possible IPO of its airport arm, to raise funds.
As per the release, multiple offers were received and out of them, Fairfax Group was selected. Fairfax India’s Hyderabad-born chairman Prem Watsa said it would work closely with all stakeholders to manage the stake in BIAL going forward.
