Friday, January 17, 2020

AAI writes to SG again, now on validity of GIC''s GMR stake

New Delhi: State-owned Airports Authority of India (AAI) has once again written to Solicitor General of India (SG) seeking his opinion on the proposed investment by Tata Group consortium partner GIC, the Singapore government''s sovereign wealth fund, in home-grown airport major GMR group''s airport business.

The move was necessitated after the Tata Group rejigged the transaction to lower its stake to comply with local regulations but in the process, GIC''s stake went up.

"It has been pointed out by some airlines that GIC may also be one of the investors in airlines operating to and from India and hence can not hold more than 10 per cent stake in the Delhi International Airport Pvt Ltd (DIAL). After Tata rejigged investment, the GIC stake has gone up. We have, therefore, written to the SG for his opinion," an official source told IANS.

DIAL is a special purpose vehicle with GMR group being the lead consortium partner and having 64 per cent stake. The AAI holds 26 per cent and Fraport AG the remaining 10 per cent in the country''s busiest airport.

As per a clause in concession agreement for the Delhi airport, an airline company cannot hold more than 10 per cent stake in it, either directly or indirectly. Tata Group controls and runs two airlines -- Vistara and Air Asia India.

Citing this, the Federation of Indian Airlines (FIA), representing three carriers GoAir, IndiGo and SpiceJet, objected to the deal saying it breached the rules which barred companies running an airline to hold more than 10 per cent stake in DIAL.
17/01/20 IANS/Outlook
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