Wednesday, November 06, 2019

Tata Consortium To Tweak Investment In GMR Airports, Reduce Stake By 5%

The will restructure its proposed investment in to comply with a policy clause which prevents airline groups from exceeding 10 per cent stake in Delhi International Airport Limited (DIAL). Tatas, which hold majority in two airlines Vistara and Air Asia India, have now decided to reduce their holding in to 15 per cent from 20 per cent planned earlier to steer clear of any regulatory violation.

Singapore-based sovereign wealth fund GIC, which is part of the consortium investing 8,000 crore in GMR Airports, will pick up the stake being shed by the The other two entities in the consortium are Hong Kong-based SSG Capital Management and Valkyrie Investments–an affiliate of GIC.

“The partners making the investment in have agreed to a revised holding amongst them to bring the percentage stake of in line with the contract signed by GMR with AAI (Airports Authority of India) during the privatisation process of DIAL,” said a person aware of the development.

The previous deal structure would have given Tatas 20 per cent stake in GMR Airports Limited (GAL) and in turn 12.8 per cent holding in DIAL. GMR holds 64 per cent stake in DIAL, while AAI and German company Fraport own 26 and 10 per cent each.

Sources aware of the development said the restructuring was necessitated as Solicitor General of India Tushar Mehta took an adverse view on the investment model. The AAI had sought SG’s opinion on whether the legality of the transaction violated the DIAL contract.
06/11/19 Spring Hill Insider

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