Mumbai/Bangalore: Three private equity funds will invest close to Rs 1,500 crore in an unlisted company of GMR Group, which runs the Delhi and Hyderabad airports.
Two of the funds are SBI-Macquarie, a joint venture between India’s largest bank and the Australian investment bank, and the PE arm of Standard Chartered PLC , said people familiar with the transaction. The third is the PE arm of a south Indian bank, they said, declining to identify it. They spoke on condition of anonymity because the transaction was at a sensitive stage.
SBI-Macquarie Fund will invest Rs 900 crore in GMR Airport Holdings , a fully-owned subsidiary of GMR Infrastructure , the Hyderabad-based group’s holding company. The Foreign Investment Promotion Board (FIPB), at a meeting on February 11, approved GMR’s proposal to raise money from SBI-Macquarie and the other funds, said a senior FIPB official. He declined to be named because the decisions taken in the meeting had not yet been made public. FIPB is an arm of the finance ministry that approves foreign investment.
In all, the three funds will invest Rs 1,440 crore. A Subba Rao, chief financial officer of GMR Group, declined to confirm or deny the fund-raising. He, however, said any funds the airport arm may raise will not be used for its existing portfolio, but may be for acquisitions or new projects.
“We do not have any immediate requirement for funds and the plan is to use it (new funds) for future capex. If we have the funds, opportunity will follow us,” said Rao. SBI-Macquarie and Standard Chartered PE declined comment.
The private equity players will invest through compulsorily convertible preference shares that can be converted into equity at a later date, said investment banking officials. Analysts tracking the company said GMR Group might use the funds for retiring debt taken for the Delhi airport, and for development of real estate.
10/03/11 Manisha Singhal & Sobha Khan/Economic Times
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