India’s GVK Power and Infrastructure has agreed to sell its remaining 10 percent holding in Bangalore International Airport to Fairfax India for 12.9 billion rupees ($200 million; €178 million).
It had previously divested a 33 percent stake to the same company in March. GVK’s exit is expected to complete by early July, with proceeds from the sale to be used to reduce debt, according to a filing at the Bombay Stock Exchange by the Indian conglomerate.
In March, Fairfax India, a Toronto-listed investment subsidiary of Canada’s Fairfax Financial Holdings, acquired a combined 38 percent stake in the airport from GVK and Zurich Airport for around $392 million. GVK retained a 10 percent stake and continued to manage the airport after this initial transaction.
Bangalore International Airport, the full name of which is Kempegowda International Airport Bengaluru, has a 30-year concession agreement with a 30-year extension option from the Indian government. As the first greenfield airport in India developed under a PPP model, the airport began operations in May 2008.
“Notwithstanding this sale, the airport sector will continue to be a core focus area for GVK,” said GVK Reddy, founder chairman and managing director of the Indian infrastructure group. “The Bangalore airport is now ready for another phase of expansion with a new runway and a new terminal to be constructed. However, we have decided to part ways with Bangalore Airport as deleveraging is top priority.”
“Our immediate focus will now be on Mumbai and Navi Mumbai airports and on selectively evaluating privatisation opportunities. The reduced debt burden gives us flexibility and releases management bandwidth to focus on these projects.”
Reddy added that capacity optimisation and real estate development will be the priorities for the existing Mumbai airport. The firm is also working to deliver Navi Mumbai International Airport, a greenfield project it won a tender for in February.
GVK has interests in the energy, airports, transportation, hospitality and life sciences sectors. It owns and operates Mumbai’s Chhatrapati Shivaji International Airport, India’s first brownfield airport to be privatised.