GMR Airports Infra Merges with Parent Company, GMR Airports

GMR Airports Infrastructure Ltd (GIL) has revealed its plans to merge GMR Airports Limited with GIL, which is expected to be concluded within the next financial year pending regulatory approvals. According to the company’s statement, the merger will enhance GMR’s partnership with Aeroports de Paris SA (Groupe ADP) to a higher level.

GIL stated that the merger is a significant move towards strengthening its balance sheet and leveraging upcoming growth opportunities. Last year, GMR Airports Infra formed a strategic partnership with Groupe ADP, which involved the latter purchasing a 49% stake in GAL.

According to Groupe ADP, they had established equity earnouts of approximately 8% of GAL and cash earnouts worth Rs 1,060 crore for GIL at the time of the transaction.

Chairman of GMR Group, GM Rao, expressed his belief that the merger would be a transformative event and a value enhancer for all stakeholders. He also highlighted the advantages of the strong partnership with Groupe ADP, which would allow the company to capitalize on fast-growing airport business opportunities and maintain its leadership position in the airport business.

GMR

According to the company, GIL and Groupe ADP will make payments to settle the cash earnouts, amounting to Rs 550 crore, and the equity earnouts. As a result, GIL’s stake in GAL will increase from 51 percent to 55 percent after the merger.

Despite the completion of the merger, GMR Group will retain its position as the largest shareholder and maintain management control of GIL. The company explained that GMR Group will own 33.7 percent of the paid-up equity share capital, while Groupe ADP will hold 32.3 percent and the public will hold 34 percent.

Additionally, GMR Infrastructure will be raising Euro 331 million (equivalent to Rs 2,900 crore) through 10-year Foreign Currency Convertible Bonds (FCCBs) from Groupe ADP. Kiran Kumar Grandhi, Corporate Chairman, says that the company aims to simplify its corporate structure and strengthen its balance sheet to enable it to achieve financial and operational excellence and maintain a competitive edge.

He emphasized that they will keep concentrating on specific expansion prospects while upholding their cautious approach to maintaining a stable financial situation.

Moreover, the company states that the consolidation will permit an earlier and complete payment of the earnouts, which the Covid situation negatively affected for two years.

The company also stated that the subscription of FCCBs by Groupe ADP will lead to further reduction of debt for GIL through the repayment of corporate debt and settling a significant portion of the potential obligations associated with GMR Power and Urban Infra Ltd (GPUIL).

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