PSP, ADIA and NIIF acquire indirect stake in Mumbai airport

The three firms have each acquired a 26.3% stake in the airport’s holding company for a total of $1bn.

Canada’s PSP Investments, the Abu Dhabi Investment Authority and India’s National Investment and Infrastructure Fund have acquired a stake in Mumbai’s international airport through a joint investment in GVK Airport Holdings, a subsidiary of Indian industrial conglomerate GVK Power & Infrastructure and the holding company of the airport.

The three firms are investing a total of 71.6 billion rupees ($1 billion; €912 million) to each acquire a 26.3 percent stake in the holding company, a spokesman for GVK confirmed to Infrastructure Investor without providing more details.

“It could take three to four months to complete the transaction,” said Ram Mankekar, GVK’s head of corporate communications.

GVKAH is currently in the process of increasing its stake in Mumbai International Airport (MIAL), the developer, operator and manager of the city’s Chhatrapati Shivaji Maharaj International Airport. MIAL is also in charge of developing the Navi Mumbai International Airport through a subsidiary, GVK said in a statement.

According to documents published on the GVK website, GVKAH will pay 21.7 billion Indian rupees to acquire an extra 23.5 percent stake in MIAL.

Once the transaction is completed, GVKAH will own 74 percent of the airport operator and developer, while the Airport Authority of India will retain the remaining 26 percent, Mankekar said, but did not specify when the share purchase would occur.

“We will now accelerate our efforts for developing the Navi Mumbai International Airport, monetising MIAL’s real estate assets and building an even stronger airports business,” GVK Reddy, the conglomerate’s founder and chairman, said in the statement.

The proceeds generated from the investment by NIIF, ADIA and PSP Investments will be used to retire debt obligations from the group and fund the purchase of shares in MIAL from South Africa’s trading company Bidvest and the Airports Company South Africa, according to the statement.

Earlier this year, GVKAH announced it would use its right of first refusal to third-party offers to acquire the stakes from Bidvest and ACSA in MIAL.

PSP Investments and ADIA declined to comment. NIIF did not respond to a request for comment.