GVK keen to hike stake in Bangalore, Mumbai airport cos

Bangalore/Hyderabad/Mumbai: Upbeat from its Rs 485-crore acquisition of 12 per cent stake in Bangalore International Airport Ltd (BIAL), GVK Power & Infrastructure Ltd today expressed its intent to further hike its holdings in Bangalore and Mumbai airports.
The GVK Infra Chairman, Mr G. V. K. Reddy, today said that, “we are keen on gaining a controlling stake in BIAL.”
The company had acquired the 12 per cent through its arm, GVK Airport Developers, earlier this month.
Mr Reddy, who was in Bangalore to attend the Forbes India Rich List function, told reporters that the company was also in talks with its South African partner, Bidvest Group, for acquiring additional stake in the Mumbai International Airport Ltd (MIAL).
In BIAL, GVK Power, Zurich International, Siemens (AG) and Larsen & Toubro own 74 per cent stake and the rest is with the Airports Authority of India and the Karnataka Government.
GVK’s interest now centres around picking up 17 per cent stake from L&T in BIAL. The company has partnered with Zurich Airport and sees a bigger role for the two in various Indian airport projects.
Sources said that L&T could potentially get a 10-fold return on its original investment for 17 per cent stake if it were to exit now.
Since Zurich International has the first right of refusal for the L&T pie, its decision is important. Either way, whether Zurich picks up that stake or not, GVK believes that they can have an arrangement to secure the rest of the stake ‘at an appropriate time’.
In the case of MIAL, GVK holds 37 per cent and Bidvest 27 per cent, the Airport Authority 26 per cent and Airport Company South Africa 10 per cent. Bidvest needs to hold up to 10 per cent for at least seven years and for the rest it has the right to exit.
21/11/09 Business Line

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Categories: Airports Nov 2009