Fairfax India buys stake in Bangalore airport
Fairfax India Holdings has completed its acquisition of a 38% stake in Bangalore International Airport for INR25 billion ($385 million).
Indian conglomerate GVK Power and Infrastructure exited a 33% stake to Fairfax, while the rest came from Flughafen Zürich AG, according to a filing. GVK plans to use the proceeds from the sale to bring down its debt level as it expands the Bangalore airport. It will continue to manage the Bangalore and Mumbai airports as well as the one it is building in Panvel.
Fairfax announced its purchase of GVK’s stake a year ago, adding Flughafen Zürich to the deal the following month. Regulatory approval was delayed until this January due to concerns over the size of Fairfax’s proposed purchase, which will make the Toronto-listed investment firm the largest single shareholder in the airport. Siemens Project Ventures owns 26% and the India and Karnataka governments hold 13% each; the remaining 10% will be held by GVK.
GVK has interests in a wide range of infrastructure assets, including roads and power in addition to the Bangalore and Mumbai airports. The company has been struggling in recent years to bring down its debt, which amounted to more than INR270 billion last year according to its most recent annual report. GVK hopes to reduce its debt by INR40 billion this year.
Fairfax India launched in 2014 and raised $1 billion the following year through a combined IPO and private placement. It raised a further $500 million through private and public offerings late last year. The firm aims to achieve long-term capital appreciation through purchasing public and private equities and debt instruments in Indian businesses and companies with substantial exposure to the country.
The airport deal represents Fairfax’s biggest investment to date in India, and its second in the country’s logistics sector this year following the purchase of a 51% stake in logistics company Saurashtra Freight in January for INR2 billion.
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