GMR group on Friday said it had acquired an additional 44.61% in an aircraft maintenance...
GMR group on Friday said it had acquired an additional 44.61% in an aircraft maintenance, repair and overhaul (MRO) facility in Hyderabad from its joint venture partner, Malaysia Aerospace Engineering (MAE), which wanted to exit the loss-making venture. The group did not specify the financials of the transaction, apart from saying that the stake was purchased for a “nominal consideration”.
“GMR Hyderabad International Airport (GHIAL) a subsidiary of GMR Infrastructure, has acquired 9,67,50,000 shares of face value of Rs 10 each, representing 44.61% stake in MAS GMR Aerospace Engineering Company (MGAE), from Malaysia Aerospace Engineering SDN BHD for a nominal consideration. Before acquisition of the stake, MGAE was a joint venture company of GHIAL and MAE. With this acquisition of stake from MAE, MGAE has now become a wholly owned subsidiary of GHIAL,” the company said in an update to the stock exchanges. GHIAL is the entity that runs the Hyderabad airport.
In July, the Board of Approvals for Special Economic Zones had given permission to the GMR group to buy out its partner. The venture was started in 2011 as a 50:50 project between GHIAL and MAE to cater to various types of aircraft.
MAE had expressed its inability to continue to support the JV due to continuous losses and its internal financial problems, which, it had said at the time, had been further aggravated by the disappearance of flight MH370 earlier this year and consequential losses.
Over the past three years, MRO has incurred cumulative losses of Rs 240.30 crore and it would require financial support from the promoters for another 2-3 years to achieve breakeven.