GMR Group on Friday said it has entered into a definitive agreement with Philippines’ Aboitiz Group to divest its entire stake in the country’s Mactan Cebu International Airport. The airport was developed by GMR-Megawide Cebu Airport Corporation (GMCAC) and was being operated by it since 2014.
GMCAC is a joint venture between GMR Airports International BV (GAIBV), a step-down subsidiary of GMR Infrastructure and a direct subsidiary of GMR Airports, and Megawide Construction Corporation (MCC). While GAIBV holds a 40% stake in the JV, the remaining 60% stake is held by MCC. Both companies have agreed to sell their existing stakes in GMCAC to Aboitiz Group’s infrastructure arm Aboitiz InfraCapital Inc (AIC).
The entire transaction will be undertaken at an enterprise value of 49.7 billion Philippine Peso (PHP) or Rs 7,050 crore, GMR Infrastructure said in a regulatory filing. “… GAIBV will receive an upfront amount of PHP 9.4 billion (Rs 1,330 crore) in lieu of the shares being transferred and notes being issued. We would continue to operate as the technical services provider to GMCAC until December 2026, would also be entitled to additional deferred consideration based on the subsequent performance of GMCAC for the same period,” the filing said.
Under the agreement, GMCAC will issue primary shares and there will be a transfer of secondary shares from GAIBV and MCC to AIC amounting to PHP 9.5 billion. This will result in AIC owning almost a 33.3% stake in GMCAC.
GAIBV and MCC will also issue exchangeable notes for PHP 7.75 billion each, aggregating to PHP 15.5 billion. “The notes will mature on October 30, 2024, and will be exchanged by AIC for the remaining 66 and 2/3% plus 1 share of GMCAC’s outstanding capital stock,” the filing said.
Srinivas Bommidala, business chairman – international airports, GMR Group, said: “We are happy to welcome and partner with AIC at Mactan Cebu International Airport. In the last eight years, we have completed the expansion plan and have been one of the fastest growing airports in the region which led to steady returns.”
“With AIC’s deep expertise in the region, we are confident that Cebu Airport will reach new heights. The decision to divest our stake in GMCAC is also in line with GMR Airport’s strategy to focus on deleveraging and redeploying capital in high-growth opportunities. Further, we have strengthened our position in the Asia Pacific region by partnering with Angkasa Pura II in developing and operating the Kualanamu International Airport at Medan, Indonesia,” he added.
Among others, GMR Group operates airports in Delhi, Hyderabad and Bidar (Karnataka). It is currently developing three major greenfield airport projects across India and Greece.