GVK buys 13.5% stake in Mumbai airport

The Indian developer has bought the additional stake from a subsidiary of South Africa’s Bidvest Group for $287m. As a result, it now owns 50.5% of Mumbai International Airport.

Indian infrastructure developer GVK Power & Infrastructure is now the biggest stakeholder in Mumbai International Airport (MIAL), after it bought an additional 13.5 percent stake from a unit of South African services, trading and distribution firm Bidvest Group.

GVK paid $287 million for the additional stake in MIAL, taking its total ownership in the airport, which handles over 25 million passengers per year, to 50.5 percent. Bidvest told the Johannesburg Stock Exchange that the divestment represented half its stake in the airport, leaving it with a 13.5 percent holding in MIAL. It expected gains from the sale to be between $43 million and $58 million.

“In all our companies we aim to get close to a 100 percent stake. It is better from a long-term strategic asset management point of view. This deal will allow us to consolidate revenues and have a better control and push through our decisions,” GVK vice chairman G.V. Sanjay Reddy told television channel ET in an interview.

Reddy added GVK will pay the $287 million over the next three years and that it will not need to raise additional funds to finance the stake purchase.

A consortium of GVK, Bidvest and Airports Company South Africa won the mandate in January 2006 to modernise MIAL, India’s busiest airport. State-backed Airports Authority of India also owns a 26 percent stake in the consortium. In addition to MIAL, GVK owns a stake in Bangalore International Airport.