GVK to divest 26% stake in airport arm to PE for $600m

GVK Power's CFO Isaac George told media GVK received term sheets from four undisclosed private equity players, and the due diligence for the deal is expected to take about a month. The company is looking to divest a 25-26% stake, but the definitive percentage will depend on investor interest and valuations.

The news comes days after GVK upped its stake in the Bangalore International Airport to 43% from 29%, acquiring shares sold by Siemens Project Ventures for more than INR6.1 billion. It additionally owns a 50.5% stake in Mumbai International Airport, and won the rights in January to build two airports in Bali and Java.

GVK's divestment opportunity parallels the strategy adopted by GMR Infrastructure, owner of the Delhi and Hyderabad airports. GMR secured its second round of private equity investment of 2011 in July, receiving $131 million through the issuance of compulsorily convertible preference shares. The buyers were Standard Chartered Private Equity (Mauritius) III, JM Financial-Old Lane India Corporate Opportunities Fund I, Build India Capital Advisors LLP and JM Financial Trustee. In March, it also received $200 million from Macquarie SBI Infrastructure Fund.

India is a leading market for domestic air traffic globally, with the International Air Transport Associating noting that domestic air passenger traffic this August grew at approximately 20% y-o-y, marking largest rise of any country worldwide. Brazil followed India.

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• Topics
• South Asia
• Infrastructure
• India
• Infrastructure India