GVK plans to control Bangalore airport by buying Siemens stake
20 Aug 2010
GVK Power & Infrastructure, which owns 29 per cent in Bangalore International Airport Ltd (BIAL), plans to buy Siemens Project Ventures' 40 per cent stake in the airport and take majority control.
''We would definitely want to acquire Siemens' stake when they decide to exit. We have the first right of refusal. We are willing to buy the stake at Rs105 per share,'' G V Krishna Reddy, chairman, GVK Group, said on Thursday.
GVK emerged as the second-largest stakeholder in the company with 29 per cent earlier this year after acquiring 17 per cent in BIAL from India's largest engineering firm Larsen and Toubro (L&T) for Rs686 crore.
It also bought out Zurich Airport's stake for Rs484.6 crore last year. Both deals were priced at Rs105 a share. The Karnataka government and the Airports Authority of India together hold 26 per cent. Zurich Airport still holds a 5 per cent stake. The Bangalore airport is valued at Rs5,000-6,000 crore.
Siemens, despite holding a majority stake in BIAL, plays no role in the management. The engineering major built the airport along with L&T, and is required to stay invested for a specific period, in accordance with the terms of the ownership agreement. The company's lock-in period ends only in 2015, though it can dilute 14 per cent in June 2011 and a further 26 per cent in 2015.
Hyderabad-based GVK also plans to invest Rs1,000 crore in expanding and modernising existing facilities. Terminal 1 will be expanded to 17 million passengers by 2015 from the existing 10.5 million. ''Building a new terminal, T2, will take three-four years. We have decided to expand the existing terminal as the main one is already running at capacity,'' said Sanjay Reddy, vice-chairman, GVK and managing director of BIAL.
