Malaysia Airports to sell its 10% holding in Delhi airport to GMR

Malaysia Airports on Tuesday announced the sale of its entire 10-per cent stake in Delhi International Airport Ltd (DIAL) for Rs492 crore to majority shareholder, GMR Airports, saying a minority share did not give it any "influence" in the venture.

The Malaysian firm, which made its first investment in DIAL in 2006, would reap a profit of nearly $22 million from the proposed sale.

In a filing to the Malaysian stock exchange, Malaysia Airports Holdings Berhad (MAHB) said it would sell 245 million equity shares for a "total cash consideration of $79 million" to GMR Airports.

MAHB had recently realigned its investment objectives to focus more on investments in companies where it can exercise a significant degree of control.

"As the existing shareholders agreement restricts foreign ownership in DIAL to not more than 49 per cent, MAHB is of the opinion that it would not be in a position to exert influence in DIAL unless it is able to own majority shareholdings in DIAL," the filing said.

For the transaction, Malaysia Airports (Mauritius), a wholly-owned subsidiary of MAHB, has entered into a conditional share sale agreement with GMR Airports.

Since 10 April 2006 up to 23 October 2008, MAHB invested over $57.6 million by taking its total stake to 10 per cent in DIAL.

"In case the offloading of 10 per cent stake is not completed before April 30, then the sale consideration could be revised," the filing noted.

"The proposed sale is seen as a strategic opportunity to crystallise its investment after realising the value of the investment in DIAL", it added.

At present, GMR Airports has a 54-per cent stake in DIAL while the Airports Authority of India (AAI) has 26 per cent share. Germany's Fraport AG Frankfurt Airport Services Worldwide holds another 10 per cent, under the shareholding pattern as on 10 March.

The government had handed over two airports - Delhi and Mumbai - to private players in 2006 under its public-private partnership (PPP) programme.