The Axis Bank-led consortium has initiated the arbitration process with the Maldives government for recovering the loans granted to GMR Infrastructure, which stand at about $160 million. The banks had granted this sum to GMR for the infra major’s Male airport project, which later ran into a political controversy, following the termination of the deal.
GMR’s arbitration talks — a separate one — with Maldives are set to happen in London on April 10. GMR is looking to get the contract reinstated, or else get compensated to the tune of $800 million.
The Maldives government had given a sovereign guarantee to the lenders in case of termination of the contract. The $529-million Male airport involved a debt component of $358 million. The consortium of Axis Bank and Indian Overseas Bank had given $160 milion, of which 84% was given by Axis Bank.
The direct agreement between the lenders’ consortium and the Maldives government says that in case of termination of the contract, the Maldives government will have to pay the damages to the banking consortium in 60 days. The contract was terminated by the Maldives government last year.
05/04/13 Anand J/Financial Expres
