Malaysia Airports exits Hyderabad, sells its stake to GMR

GMR Airports, an arm of the GMR Group, has entered into an agreement with Malaysia Airports Holdings Berhard to acquire the 11-per cent stake that the Malaysian firm holds in GMR Hyderabad International Airport for $76.05 million (Rs485 crore).

The exercise is expected to be completed by 30 April, subject to an extension up to 1 December 2018, the Malaysian airport developer said in a regulatory filing to the Malaysian bourses.

In an exchange filing on Friday, GMR said it will acquire 4.15 crore shares which converts into 11 per cent in the airport company from Malaysia Airports Holding and its Mauritius subsidiary, subject to approvals. GMR Hyderabad airport is a special purpose vehicle, and runs the Rajiv Gandhi International Airport in the city.

GMR Airports currently holds a 63-per cent stake and after the acquisition this will rise to 74 per cent. Of the remaining stake, 13 per cent is held by the Airports Authority of India and the remaining 11 per cent by the Telangana government.

While MAHB holds 6,460 shares (0.1 per cent) stake in GHIAL, its subsidiary MAMPL holds 41,573,540 shares (10.9 per cent) in the Hyderabad airport operator.

According to understanding between the two parties, the price is based on the assumption that the transaction takes place on or before 1 December 2018. If the process is not achieved by this date, the agreement will be terminated, unless otherwise agreed.

While GMR did not divulge any details of the deal, MAHB informed Bursa Malaysia that the sale consideration was arrived at on a "willing-buyer willing-seller" basis after taking into consideration GHIAL's audited consolidated profit attributable to equity shareholders for the financial year ended 31 March 2017, of Rs2,834.2 million and net assets of Rs3,026.2 million.

The fair market valuation report prepared by an independent professional business valuer in 2017 and the future prospect of GHIAL in the concession-based airport operation and development business was also taken into consideration, MAHB added.

According to the Malaysian airport developer, the proposed disposal of stake is part of its "portfolio rebalancing strategy" and is an attempt to "unlock its investment in GHIAL at an attractive value".

The proceeds of the stake sale will be used for general corporate purposes and expenses in relation to the proposed disposal, it added.

GHIAL was set up in 2002 to design, finance, build, operate and maintain the Rajiv Gandhi International Airport at Shamshabad in Hyderabad and the airport commenced commercial operations from 23 March 2008. The Build, Own, Operate and Transfer (BOOT) project is based on the public-private partnership model.