GMR Infra seals deal with three PE investors, gives 5.8% in airport firm

GMR Infrastructure will give Rs 35.6 billion by way of cash and 5.86 per cent stake in its airport holding company to three private equity (PE) investors, ending two years of litigation.

The immediate cash payout works out to around Rs 15 billion, as the three investors are to give new loans of Rs 20.05 billion as part of the transaction. In 2010-11 and 2011-12, GMR Group had raised Rs 14.78 billion via compulsorily convertible preference shares from SBI Macquarie, Standard Chartered Private Equity, JM Financial Old Lane and others. The investment was made in GMR Airports (GAL), which controls the airports at Delhi and Hyderabad.

In the agreement, the PE companies were assured of an exit through an Initial Public Offer of equity (IPO) or promoter buyback. The PE investors had a right to acquire 49 per cent in GAL in an event of a default. In 2015, GMR Group exercised a call option to buy back shares held by the PE investors but this was subject to fulfillment of certain conditions and regulatory approvals.