Wednesday, July 08, 2020

Groupe ADP, GMR restructure airport deal due to coronavirus pandemic

GMR group and Group ADP have restructured contours of the deal under which the French airport operator will pay Rs 9,720 crore instead of Rs 10,780 crore which it had agreed to pay earlier.
The restructuring shows the long lasting impact of Covid-19 on the aviation sector with air traffic taking more time to recover than originally expected.
However, ADP has increased the earn out payment by Rs 1,060 crore from Rs. 4,475 to Rs 5,535 crore. Earnouts are payment based on certain performance conditions GMR Airports has to achieve by 2024. The targets include increasing footfall of passengers and monetization of land in Aerocity in Delhi.

“In order to take into account the pandemic impact linked to the Covid-19 on the aviation sector and its medium term perspectives in the airports of GMR Airports, Groupe ADP and GMR have amended the share purchase agreement. As per the amendment, the price paid at second closing is reduced by Rs. 1,060 Crores compared to the initial purchase price of Rs. 5,532 Crores,” Groupe ADP said in a statement.

In February, GMR had signed an agreement with the owner of Paris Airport to sell a 49 per cent stake in its airport-holding company. The group was supposed to raise Rs 10, 780 crore from the deal, to pare its debt. The deal was structured in two phases and valued GMR Airports at Rs 22,000 crore.
With the deal closed, GMR Airports will be jointly owned by Airport De Paris and holding company GMR Infrastructure which will hold 51 per cent.
08/07/20 Arindam Majumder/Business Standard
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