Deals

GMR bags Male airport contract

GMR Infrastructure, in a joint venture with Malaysian Airports, has won the contract to expand and operate Male International Airport, in the Maldives. The project is estimated to cost $360m and will be financed with a 75:25 debt-to-equity ratio.

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A GMR Infrastructure/Malaysian Airports (MAHB) consortium has won the bid to build, operate, modernise and expand the Maldives’ Male International Airport, a GMR spokesperson told Infrastructureinvestor.com.

Maldives' Male Airport
He also indicated that an investment of $360 million will be made by the consortium in this project. According to media reports, GMR holds a 77 percent stake in the consortium while the remaining 23 percent is held by MAHB.

The project will reach financial close with a 75:25 debt-to-equity ratio, including financing from the State Bank of India and other banks, according to a report in the Economic Times.

The airport, which is already operational, will be handed over in running condition to the GMR-led consortium in the first quarter of 2011 for a 25-year concession period that can be further extended by 10 years, the GMR spokesperson explained.

Three consortia – a Franco-Turkish team including Aeroports de Paris and TAV; Zurich Airport and GVK; and the GMR/MAHB team were invited by the Maldives government to take part in the international bid, which was monitored by Washington-based International Finance Corporation, part of the World Bank Group.

According to news reports from the Maldives, GMR has proposed to pay the government $78 million upfront, 1 percent of the total profit in the first year (until 2014), and 10 percent of the profit from 2015 to 2035. The company is also understood to have agreed to pay 15 percent of fuel trade revenues in the first four years and 27 percent from 2015 to 2035.

The airport, situated on Huhule Island, is the biggest airport in the Maldives. It is the second airport contract that GMR has won in the Maldives as it had previously signed a memorandum of understanding with the government for the modernisation and operation of Hanimaadhoo airport, situated in the Northern Islands of Maldives.

GMR Group, of which GMR Infrastructure is a subsidiary, is a Bangalore-headquartered global infrastructure firm with investments in airports, energy, highways and urban infrastructure. The group is about to complete the eighth-largest airport terminal in the world – in Delhi – with a floor space of 5.4 million square feet.