GVK acquires 12% in Bengaluru airport

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Mumbai, Bangalore: GVK Airport Developers Pvt Ltd, a wholly-owned subsidiary of GVK Power and Infrastructure Ltd (GVKPIL), has acquired a 12% stake in Bengaluru International Airport Ltd (BIAL) from Zurich Airport for Rs 484.60 crore. GVK and Zurich Airport will also jointly pursue opportunities for airport development projects in the country.

A GVK spokesperson claimed that with this deal, GVK would become the largest developer of airports in the private space. Other big player is Bangalore-based GMR, a developer for the Delhi and Hyderabad airports. GMR is also part of a consortium to develop an airport in Istanbul.

Following the stake sale, Zurich Airport will hold 5% stake in BIAL, but will continue to operate the 18-month old airport along with Siemens, L&T and GVK. Private promoters Siemens (40% stake), L&T (17%), GVK and Zurich will together hold 74% stake in BIAL’s equity, while the remaining 26% is with the government. Of this, 13% is with the government of Karnataka and 13% with the Airports Authority of India.

GVKPIL said acquiring a pie in BIAL’s equity will boost its efforts to expand into airport business in India. The company is also involved in the modernisation of Mumbai’s Chhatrapati Shivaji International Airport through the consortium, Mumbai International Airport Limited (MIAL). GVK holds nearly 37% stake in Mumbai Airport. The other private partners in the consortium are Airports Company South Africa (ACSA) and the Bidvest Group.

India has kicked of a modernisation drive at all metro airports in the country since the start of the decade with private-public participation. Modernisation plans for 35 non-metro airports are also on the anvil. Zurich AG was selected to operate, manage and maintain the greenfield international airport project in 2001, along with Siemnes and L&T. The airport began its first phase of operations in May 2008 and into its second phase, is building a second runway and a new terminal. BIAL has so far invested Rs 2,273 crore in the airport.

There is growing interest among foreign companies in airport development in India. Recently, Singapore's Changi Airport made its first major airport investment in India with an acquisition of a strategic 26% equity stake in the Bengal Aerotropolis Projects. India's first privately owned airport and aerotropolis, or airport city, will be built in Durgapur in West Bengal.