Bangalore airport promoter raked huge profit by selling stake: panel

A joint house committee of the Karnataka legislature on Monday took exception to the huge profits made by Unique Zurich Airport, one of the promoters of the Bangalore international airport, by off-loading 12 per cent of its 17 per cent equity holding in October 2009.
"The private promoter (Unique Zurich Airport) walked away with an over 1,050 per cent return in just four years by off-loading 12 per cent (Rs.46.15 crore) of its 17 per cent (Rs.65.38 crore) stake at a whopping value of Rs.484.6 crore," the committee said in its report, tabled in the state legislative assembly earlier in the day.
The Swiss-based Unique decided on Oct 6 to sell its majority stake to GVK Power and Infrastructure Ltd (GVKPIL). GVK is the private operator of India's busiest airport - the Chhatrapati Shivaji International Airport in Mumbai.
Noting that the private players had set their eyes on huge multiplication of their investment and had cut many corners for the sake of short-term profit, the 50-page report said the government had merely replaced the public monopoly of the state-run Airport Authority of India (AAI) with private monopoly in contrast to the competition in airlines.
"Sweet-coated policies towards building private airports and the watertight concession agreements that are skewed in favour of private players contributed to the factor of huge expected return of 1,050 per cent in just four years," the report pointed out.
Larsen and Toubro Ltd (L&T) Infrastructure Development Projects Ltd, the second private partner in the consortium - Bangalore International Airport Ltd (BIAL), also sold its 17 per cent equity stake (Rs 65.38 crore) to GVK Dec 6 for Rs 686 crore (Rs 6.86 billion/$148 million) at the rate of Rs 105 a share.
22/10/09 Indo-Asian News Service/Hindustan Times

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Categories: Airports Dec 2009