GMR in talks for a $360m loan for Male airport

Indian developer GMR Infrastructure is in talks with an Indian bank for a $360m loan to fund a recently awarded airport project in Maldives. The loan from Axis Bank for a period of 12 years is expected to be signed by the end of the month.

Indian infrastructure developer GMR Infrastructure is in talks with Axis Bank, an Indian financial services firm, for a loan worth $360 million to fund Male International Airport, a source close to the company told Infrastructure Investor.

While media reports suggest the loan for a period of 12 years may be signed by end of this month, company officials from GMR declined to comment on this.

In June this year, GMR Infrastructure, in a joint venture with Malaysian Airports, won the contract to expand and operate Male International Airport in the Maldives.  The project, which according to a source has a total cost of at least $500 million, is to be financed with a 75:25 debt-to-equity ratio.

The airport, which is already operational, will be handed over 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 project, which comprises a 77 percent stake owned by GMR and 23 percent by Malaysia Airports, will be ready by 2014.

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

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.