France's Groupe ADP to buy 49% stake in GMR Airports for Rs 10,780 crore

France's Groupe ADP will acquire 49 per cent stake in GMR Infrastructure's airport business for Rs 10,780 crore, a move that will help GMR reduce the debt burden and Groupe ADP spread its global footprints. "The first tranche of Rs 5,248 crore will be received by GMR Group immediately. This money will help deleverage the group further and result in improved cash flows and profitability," the group said in a statement.

Groupe ADP said the operation would unfold in two phases: a first phase would be realised in the coming days for a 24.99 per cent stake, while the second phase, for 24.01 per cent, was subject to certain regulatory approvals from the Reserve Bank of India, and would be concluded in the upcoming months. Under a share purchase agreement, Groupe ADP will buy 49 per cent stake in GMR Airports Ltd (GAL) for an equity consideration of Rs 10,780 crore. This values GAL at the base post-money valuation of Rs 22,000 crore.

Out of the total amount, Rs 9,780 crore would be towards the secondary sale of shares by GMR group and Rs 1,000 crore would be equity infusion in GAL, the company said in a statement. "As part of the terms of the transaction, GMR will retain management control over the Airports Business with Groupe ADP having the customary rights and Board representation at GAL & its key subsidiaries," it said.

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Both GMR Airports and Groupe ADP handled total 336.5 million passengers in 2019, which is "the highest across the world", the company said.

GMR group operates Indira Gandhi International Airport in New Delhi, Hyderabad's Rajiv Gandhi International Airport and Mactan Cebu International Airport in partnership with Megawide in the Philippines, while Groupe ADP develops and manages airports, including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget. "The partnership with Groupe ADP is in line with GMR's business direction to become a global airport developer and operator... With Groupe ADP, GMR will have smoother access to global markets, opening up newer avenues of business growth," GMR Group Chairman G M Rao said.

Augustin de Romanet Chairman and CEO of Aeroports de Paris SA-Groupe ADP said the acquisition of 49 per cent stake in GAL fits within Groupe ADP's strategy. "This acquisition comes with a robust industrial partnership and enables Groupe ADP to build, only two years after taking control of TAV Airports, a unique worldwide network of airports with solid industrial expertise and strong development capacities. Medium and long term growth driver, this acquisition is a transforming position for the group in one of Asia's most dynamic and promising countries," he said.

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Airports at Mopa in Goa and Heraklion, Crete, Greece in partnership with GEK Terna, are under development by GMR Group. During the fiscal year 2019, GMR Airports recorded a total revenue of Rs 5,500 crore and reported an EBITDA of Rs 1,591 crore.

Edited by Manoj Sharma