GVK to sell stake in airport business by FY'14 end: Official

Written by Press Trust of India | Hyderabad | Updated: Aug 13 2013, 00:04am hrs
GVK Group, which manages Mumbai and Bengaluru international airports, has received proposals from as many as five companies to sell stake in the airport business and a deal is likely to be sealed by this fiscal end.

According to Isaac George, director of finance and chief executive of GVK's construction business, four of the five companies which have evinced interest to pick up stake are strategic investors. The other one is a financial entity.

"We are looking at Rs 2,500 crore. Depending up on the valuation, we may go for 25 to 35 per cent stake dilution," George said on sidelines of GVK Power & Infrastructure AGM today.

"We want to close this (due diligence) part by September end. Then, we will see which one is the best. We will have to go to CCI, we will have to go to FIPB. (They are) all separate processes. It may take another 5 months after that" he added.

GVK currently runs Mumbai and Bengaluru Airports. It holds 37 and 43 per cent stake respectively in the airports.

According to George, four people have completed the due diligence and the company has signed term sheets with three companies. Another investor is expected to give term sheet this week.

Meanwhile, George also said GVK requested IDBI and IDFC -- the lead financiers for its power projects in Andhra Pradesh -- to allow the group to give an 'extended moratorium', or deferment of the principal amount of loan by two years. This is because , as the plants are not able to operate due to gas shortage from Reliance D-6 field.

"It is an extended moratorium we are asking. IDBI is the lead banker and IDFC is also lent. Both of them have principally agreed. They are working on the modalities," he added.

GVK has requested the lenders to shift the payment of principal amount which is two-year debt of Rs 500 crore.