With its second major overseas divestment in just nine months, the GMR group expects to reduce its debt by about Rs5,000 crore
GMR Group on Monday said it signed a definitive agreement with Malaysian Airports Holding Berhard (MAHB) to divest its 40% stake in Istanbul Sabiha Gökçen (ISG) and LGM Tourism, for €225 million (around Rs1,910 crore).
In a statement, GMR Infrastructure Ltd said, "Definitive agreements have been signed subsequent to the exercise of right of first refusal by MAHB under the existing shareholders agreement of ISG on 23 December 2013."
GM Rao group chairman, GMR Group said, "We at GMR Group continue to focus on creating liquidity and enhance value by effective portfolio management under our asset light asset right (ALAR) strategy. The efforts of the Group taken in recent times shall strengthen our balance sheet."
GMR said the transaction is subject to customary closing conditions including the approval of the relevant government authorities and the project lenders to ISG. This is the second major divestment of overseas assets by the GMR Group in less than nine months. Earlier in March 2013, the cash-strapped GMR group sold its 70% interest in GMR Energy (Singapore) Pte Ltd to FPM Power Holdings for an equity value of 660 million Singapore dollars (S$).
The divestment of these two assets is estimated to release around Rs3,500 crore of capital, simultaneously reducing an estimated Rs5,000 crore of debt, the company said.
Istanbul Sabiha Gökçen International Airport is located on the Anatolian side of Istanbul and is one of the world’s fastest-growing airports. The airport currently hosts more than 58 different carriers covering over 125 destinations.
The airport’s new terminal was completed in a record time and was commissioned in October 2009, 12 months ahead of schedule. LGM Tourism undertakes the operation of non-aero services at the airport such as hotel, food & beverages, and lounge. GMR’s investment at ISG was around €71.6 million.
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