This gives promoters muchneeded leeway to free up some of the pledged shares at the conglomerate’s listed arm, GMR Airports, the company said on Wednesday, after ADIA’s confirmation of the funding commitment.
“India’s aviation sector has strong growth prospects, backed by the positive long-term fundamentals of the Indian economy, while GMR Group is one of the country’s leading airport operators,” said Khadem Al Remeithei, executive director for infrastructure department at ADIA, the government of Abu Dhabi’s global investment arm.
ET BureauGMR Enterprises owns about 25% of GMR Airports. Groupe ADP, or Aéroports de Paris SA, owns around 30%. The entity that is obtaining the funding is a 100% subsidiary of GMR Enterprises.
Debt-to-equity Conversion Option
ADIA said the structured debt funding was in line with its approach of “backing entities that are developing world class transport assets.”
The investment from ADIA is “long-term,” and the debt instruments will only need to be redeemed over eight years, according to a person aware of the matter. There is also an option to convert the debt into equity if the need arises, said the person. ADIA is also a backer of India’s quasi-sovereign fund, the National Investment and Infrastructure Fund. It recently established a subsidiary at the GIFT City. “This investment from ADIA will facilitate the repayment of all external debt at GEPL (GMR Enterprises), strengthening our ability to support the continued growth of GAL (GMR Airports),” said Kiran Grandhi, corporate chairman, GMR.Slashing Debt:
Grandhi said the company has reduced a “significant quantum” of corporate debt over the years. “We have also demerged GMR Power and Urban Infra Ltd from GMR Airports Infrastructure Ltd, and merged GMR Airports Ltd with GMR Airports Infrastructure Ltd to form GMR Airports Ltd — a pureplay, publicly listed airport platform,” he said.
