Even as it has shed many international assets as part of a rationalisation strategy, GMR Infrastructure is keen on airports and energy projects outside the country. The company says it will not shy away from developing energy projects overseas though it may not operate one.
GMR has not taken on any large development project overseas since its exit from power producer InterGen NV, which yielded $1.23 billion, in April 2011. Instead, it was forced to give up its profit-making airport in Male, following the termination of the contract by the Maldives government last December. Currently, it runs the Sabiha Gokcen airport in Istanbul which it started developing in 2008.
?We are not deliberately saying no to international projects, it is project specific. Tomorrow if we get an attractive project, we will go for it,? Parmit Chadha, CEO-Strategy and Corporate Development, GMR Group, told FE. He added that exiting a project is based on the valuation the company is accruing and the shedding of many international projects just happened to take place within short period of time.
?We may not operate an energy project overseas, but will not shy away from development.? said Chadha. ?In Singapore we divested because of other reasons like managing an operations team there which, without a critical mass, is difficult.? The latest bout of divestments by GMR, in an approach called ?Asset Light-Asset Right?, includes the sale of two coal mines in South Africa held through a Canadian subsidiary in addition to the exit from Island Power in Singapore for R2,900 crore, both in March. A month earlier, the company had sold stake in an Andhra Pradesh highway project to Macquarie SBI Infrastructure Fund.
To be sure, GMR has been exploring international opportunities in this period. Recently, it said it is evaluating a $400 million airport upgradation project in the Philippines with a local partner.
?Airport projects come sporadically anywhere. It is not a steady market,? Chadha said, mentioning the company?s bid evaluation for an airport in Brazil. He said that the company withdrew only because the project didn?t meet their financial criteria. ?We can?t restrict ourselves to any regions in this business. What if no governments come up with bids for airports in that region? We keep evaluating projects as they come,? he said.
GMR has earlier said infra developers create more value during the development phase while margins are lower in the operational phase, as most of the risks would have been mitigated by then. According to Chadha, most of their international projects were going smoothly and Male was a different issue altogether.
