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GVK acquires 13.5% in MIAL for Rs 1,140 cr

19 Oct 2011 Evaluate

GVK Airport Holdings Pvt Ltd, an arm of GVK Power & Infrastructure Ltd (GVKPIL), completed the acquisition of 13.5 per cent stake of Bid Services Division (Mauritius) Ltd in Mumbai International Airport Pvt Ltd (MIAL). The company had announced its decision to purchase the stake in March. GVK bought the stake for $231 million (Rs 1,140 crore), valuing MIAL at around Rs 8,500 crore. After the acquisition, GVK’s stake in MIAL stands at 50.5 per cent. While the Airports Authority of India owns 26 per cent, Bid Services Division (Mauritius) and the Airports Company of South Africa hold 13.5 and 10 per cent, respectively. The acquisition is the second-biggest by the GVK group to consolidate its position in the airport business. In August, the group increased its stake in Bangalore International Airport Ltd (BIAL) to 43 per cent, by acquiring 14 per cent stake from Siemens for Rs 614 crore. The deal valued BIAL at Rs 4,300 crore. The acquisition is being financed with a short-term debt and it is looking for a private equity investor in the airports’ holding company and it will use those funds to repay the debt.

The Chhatrapati Shivaji International Airport, Mumbai, is GVK’s first and flagship airport project in India. With the completion of this acquisition process, GVK will have a majority control in one of India’s largest and prestigious infrastructure projects. It also underscores our long-term commitment and strategic interest in the airport sector in India. MIAL is executing an airport modernisation project worth Rs 9,800 crore. The construction of the integrated passenger terminal is underway and will be complete in mid-2013. In the first quarter of 2011-12, MIAL made a net profit of Rs 57.8 crore, against Rs 40.1 crore in the same period last year. The airport handled 29 million passengers last year and sees around 700 flight movements daily.

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