Fairfax India ups Bangalore airport stake to 48%

The firm will buy the remaining stake held by GVK Power & Infrastructure, which exited a 33% stake to Fairfax earlier this year. As with the previous sale, GVK will use the proceeds from this exit to pay down its debt. The infrastructure investor had planned to continue managing the Bangalore facility, but in a filing said that it will focus instead on the Mumbai airport and the one it is building in Panvel.

“Over the last seven years, we have worked very hard to transform BIAL into a world-class airport,” said GVK founder and Managing Director G.V.K. Reddy. “The airport is now ready for another phase of expansion with a new runway and a new terminal to be constructed. However, we have decided to part ways with BIAL as deleveraging is top priority.”

Fairfax India launched in 2014 and raised $1 billion for it the following year through a combined IPO and private placement. It raised another $500 million last year through a similar arrangement. It 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 earlier investment in BIAL, which comprised a 5% stake held by Flughafen Zürich along with GVK’s holding, represented the firm’s biggest investment to date in India. Though the purchase was announced last year, regulatory approval was delayed until January due to concerns over the size of Fairfax’s stake, which made the Toronto-listed investment firm the largest single shareholder in the airport.

The sale is expected to close by next month, subject to necessary approvals including from lenders.

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• Topics
• South Asia
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• Expansion
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