GMR in talks with PEs to raise $450 m from airport biz stake

GMR in talks with PEs to raise $450 m from airport biz stake
The Economic Times, November 27, 2009, Page 35

Mohit Bhalla ET NOW

INFRASTRUCTURE conglomerate GMR group is in talks with private equity funds 3i Investments and Macquarie-SBI Infrastructure to raise $450 million in GMR Airport Holdings, a person familiar with the company’s plans told ET NOW.

GMR wants to sell a minority stake in the airport subsidiary to raise cash for investments in infrastructure and power. The airports business, which includes the Hyderabad and Delhi airports, account for 45% of the group’s revenues.

A spokesperson for GMR said in an emailed statement to ET NOW that as a corporation they pursue various options for raising funds and cannot comment on this specific query. Fiona McDonald, a spokesperson for Macquarie Group in Singapore termed the queries from ET NOW as market speculation. Emailed queries to Jennifer Letki, a spokesperson for 3i Investments in London, elicited a similar response.

GMR’s Group chief financial officer, A Subbarao, said in a media statement two days ago that the company plans to invest $650 million in its various businesses over the next two years. He also said that the company was talking to various private equity investors for buying stake in its infrastructure and power businesses.

According to information available on its website, the London-headquartered 3i Investments manages a portfolio of $920 million in investments in India across media, automotives, construction, power, ports and manufacturing amongst others. Amongst its major investments is a $272 million investment in Adani Power.

Other Investments include stakes in International Tractors, OOH Media, Krishnapatnam Port Company and Vijai Electricals. 3i also closed out a $1.2 billion India Infrastructure fund in April 2008 of which it has already deployed $330 million.

Macquarie and SBI announced the launch of their $1billion infrastructure fund in April this year. GMR Infrastructure leads a consortium that is rebuilding the New Delhi airport, has developed the international airport at Hyderabad in southern India, and also holds a 40% stake at the second airport at Istanbul in Turkey.

The company has also signed a Memorandum of Understanding (MoU) with the government of Maldives for preparing a feasibility study for a new airport project there and is also bidding for the privatization of the existing airport project in that country.