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New Delhi, February 21, 2020
GMR Infrastructure Limited (GIL) announced on Thursday a strategic partnership with Groupe ADP for its Airports Business as part of which it has signed a share purchase agreement pursuant to which the latter would hold 49% stake in GMR Airports Limited (GAL) for an equity consideration of Rs 10,780 crore.
This values GAL at the Base Post Money Valuation of Rs. 22,000 crore, a press release from GIL said.
The equity consideration comprises Rs. 9,780 crore towards secondary sale of shares by GMR group; and Rs. 1,000 crore equity infusion in GAL, it said.
Groupe ADP has also pegged earn-outs up to Rs. 4,475 crore linked to achievement of certain agreed operating performance metrics as well as on receipt of certain regulatory clarifications over the next five years.
"Thereby, total valuation assuming all above earn-outs are successfully consummated, may reach Rs. 26,475 crore on Post Money Basis," the release said.
The first tranche of Rs. 5,248 crore will be received by GMR Group immediately. This money will help deleverage the Group further and result in improved cash flows and profitability, it said.
As part of the terms of transaction, GMR will retain management control over the Airports Business with Groupe ADP having the customary rights and Board representation at GAL and its key subsidiaries, the release said.
"The deal will unveil a first of its kind airport development and operations platform globally. Together, GMR and Groupe ADP will combine unmatched strengths in airport development and operations, offering the highest levels of passenger experience. This will also open up new opportunities for route development, enhanced expertise in operations, retail, IT, innovation, engineering and many more areas.
"As per 2019 passenger statistics, the combined passengers handled by GMR Airports and Groupe ADP stands at 336.5 million, the highest across the world," it said.
G M Rao, Chairman, GMR Group said, “The partnership with Groupe ADP is in line with 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. With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth.”
Augustin de Romanet Chairman and Chief Executive Officer of Aéroports de Paris SA-Groupe ADP stated: "The acquisition of a 49% stake in GMR Airports fits within 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 with a solid industrial expertise and strong development capacities. This acquisition will constitute a growth driver in the medium term, and also a transforming position for the group in one of Asia's and the world's most dynamic and promising countries."
According to the release, the partnership between GMR and Groupe ADP is being structured as a strong strategic partnership to be built on two-way exchange of expertise, personnel, knowledge and market access. Passengers and other stakeholders will also benefit immensely and thereby setting newer industry-defining benchmarks.
GMR Group’s Airport portfolio has around 172 mn passenger capacity in operation and under development, comprising India's busiest Indira Gandhi International Airport in New Delhi, Hyderabad’s Rajiv Gandhi International Airport, Mactan Cebu International Airport in partnership with Megawide in Philippines. Greenfield projects under development includes airport at Mopa in Goa and airport at Heraklion, Crete, Greece in partnership with GEK Terna. The GMR-Megawide consortium has won the Clark International Airport’s EPC project, the second project in Philippines. The Group had received Letter of Intent for development and operations of Nagpur Airport on PPP basis and further has emerged as the highest bidder for the development and operation of greenfield airport at Bhogapuram in Andhra Pradesh. The group recently signed concession agreement to commission, operationalize and maintain the Civilian Enclave at the Bidar Airport in North Karnataka. GMR Group is developing airport cities on the commercial land available around its airports in Delhi, Hyderabad and Goa.
Groupe ADP develops and manages airports, including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget.