GMR Infrastructure Limited (GIL) has announced a strategic partnership with Groupe ADP for its Airports Business, under which, Groupe ADP will acquire 49 per cent stake in GMR Airports Limited (GAL) for an equity consideration of Rs10,780 crore, valuing GAL at Rs22,000 crore.
This equity consideration comprises Rs9,780 crore towards secondary sale of shares by GMR group and Rs1,000 crore equity infusion in GAL.
Groupe ADP has also pegged earn-outs up to Rs4,475 crore linked to achievement of certain agreed operating performance metrics as well as on receipt of certain regulatory clarifications over the next 5 years, which will take total valuation, assuming all above earn-outs are successfully consummated, to Rs26,475 crore on post money basis.
The acquisition will be made in two tranches - the first will be realised within the coming days for a 24.99 per cent stake and the second, for 24.01 per cent, subject to certain regulatory conditions, including regulatory approvals, in particular from the Reserve Bank of India.
GMR will receive the first tranche of Rs5,248 crore of the transaction immediately. This money will help deleverage the group further and result in improved cash flows and profitability.
Once the transaction is completed, GMR Airports will be jointly owned with GMR Infrastructure Limited, the listed entity of GMR Group, keeping 51 per cent stake and retaining control over the company. Groupe ADP will be granted highly extended governance rights.
GMR will retain management control over the airports business with Groupe ADP having the customary rights and board representation at GAL and its key subsidiaries.
With the deal, the first-of-its-kind airport development and operations platform globally, Groupe ADP will create a leading global network of airports.
Together, GMR and Groupe ADP will combine unmatched strengths in airport development and operations, offering the highest levels of passenger experience. This will also open up new opportunities for route development, enhanced expertise in operations, retail, IT, innovation, engineering and many more areas.
As per 2019 passenger statistics, the combined passengers handled by GMR Airports and Groupe ADP stands at 336.5 million, the highest across the world.
“The partnership with Groupe ADP is in line with GMR’s business direction to become a global airport developer and operator. We have been on a journey of defining airports of the future with key focus on passenger experience by leveraging enhanced technology and offering superior amenities. With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth,” GM Rao, chairman, GMR Group, said.
"The acquisition of a 49 per cent stake in GMR Airports fits within Groupe ADP's strategy. It sets a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports, a unique worldwide network of airports with a solid industrial expertise and strong development capacities. This acquisition will constitute a growth driver in the medium term, and also a transforming position for the group in one of Asia's and the world's most dynamic and promising countries," Augustin de Romanet, chairman and chief executive officer of Aéroports de Paris SA-Groupe ADP, stated.
GMR said the partnership with Groupe ADP is being structured as a strong strategic alliance to be built on two-way exchange of expertise, personnel, knowledge and market access. Passengers and other stakeholders will also benefit immensely and thereby setting newer industry-defining benchmarks.
GMR Airports has a portfolio of world-class assets comprising seven airports in three countries (India, the Philippines and Greece) and a subsidiary specialized in project management (GADL).
Four of the airports, which welcomed 22 million of passengers in 2019, are either currently under development (Goa and Heraklion) or won after a bidding process (Nagpur and Bhogapuram). They will be operated by GMR Airports once the works are completed.