GVK Group to divest stake in airport subsidiary

21 Oct 2011

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New Delhi: With GVK Power & Infrastructure Ltd becoming the largest stakeholder in the Mumbai and Bangalore airports just last week, it has now entered talks with investors to divest upto 26% of its stake in its airport subsidiary in a bid to raise as much as Rs3,000 crore.

Reports suggest that GVK may have attracted interest from as many as four private equity players and that these parties may be conducting due diligence operations. GVK officials said the diligence process is expected to be complete in a month or so.

According to GVK officials, the company hopes to raise Rs2,500-3,000 crore in return for a 25-26% stake sale. If it secures such valuations then it would value the company's airport business at Rs10,000-12,000 crore.

On Wednesday, the company increased its stake in Bangalore International Airport Ltd (BIAL) to 43%, up from 29%, by buying 53.8 million equity shares from Siemens Project Ventures GmbH for Rs613.82 crore.

A day earlier the firm had acquired a majority stake (50.5%) in Mumbai International Airport Ltd (MIAL) by buying a 13.5% stake from Bid Services Division (Mauritius) Ltd for $231 million (Rs1,147.9 crore).

GVK Airport Developers is conducting a feasibility study for airports in Bali and Java in Indonesia, for which it has won construction rights.

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