Debt-ridden GVK may list airports by 2015-end

India could have its first listed airport later this year or by the third quarter of 2015/16.

Reliable sources speaking with Business Today have said that GVK , the infrastructure major which has been desperately trying to prune its high debt (to the tune of around Rs 24,500 crore, with around Rs 3500 crore sitting on the books at the holding company level), is working on a large IPO to take its airport business public.

Apart from this Rs 3,500 crore debt, the rest of its consolidated debt is spread across its 18 odd subsidiaries. While the details on the listing plan are not available, it is apparently meant to help either completely wipe out or substantially prune the debt at its holding company level. This is a more worrying aspect for the company since at the holding company level, unlike at a project or SPV (special purpose vehicle) level, there are no revenue-generating assets that will help reduce debt.

Since a holding company does not have any operating assets to service the debt from earnings, if it is left unattended, loans at the holding company level could lead to a debt trap. Without income generating assets , the company would have to constantly keep borrowing to pay back previous debt. In fact, GVK, like most of its peers which are also coping with debt, has not been bidding for any new projects and spending time on completing its existing projects.

Currently, it is estimated that globally there are only 20 listed airports-most of them being major airports like the Heathrow Airport and the Sydney Airport. Within India, GVK and GMR are the two major players in the airports space with GVK developing, managing and operating the Mumbai and Bangalore airports and GMR doing the same in Hyderabad and Delhi.