MUMBAI: The GVK group Friday said it has completed the sale of its 33% stake in the Bangalore International Airport Limited to Fairfax India Holdings Corporation for Rs 2,202 Crore.
The Indian unit of billionaire Prem Watsa’s investment company has also bought another 5% in the airport company from Flughafen Zurich AG.
The completion follows the government’s long awaited security clearance in January, to Watsa’s proposed investment in India’s third busiest airport.
Chairman GVK Reddy will continue to be the Co – Chairman, BIAL and G V Sanjay Reddy will lead the management team as the Managing Director of BIAL, said a statement from the company.
“We reiterate that our primary focus is on deleveraging our balance sheet, and all proceeds from this stake sale shall be used to bring down our debt obligations to our lenders. We look forward to partnering with Fairfax and working with all the stakeholders in developing the Kempegowda International Airport through its next stage of expansion,” GVK Reddy said.
The conglomerate will continue to operate the Bangalore airport. It also runs the Mumbai airport and has a mandate to build a second airport on the outskirts of the city in Panvel.
Indian-born Watsa’s Fairfax Group had in March last year, announced its decision to buy a 33% stake in BIAL from GVK Group, valuing the eight-year-old airport at about Rs 6,500 crore. A month later, Fairfax signed another deal to buy 5% stake held by Flughafen Zurich.
GVK had said the sale was one of its fund-raising steps to reduce debt. The conglomerate has total debt of over Rs 22,000 crore on its books.
The Bangalore airport is Fairfax Group’s largest investment in the country since it opened an India-dedicated investment company in 2014. It is also the company biggest bet on India’s infrastructure sector.
Post the deal, Fairfax will hold 38% of BIAL, followed by Siemens Project Ventures with 26% while the governments of India and Karnataka will each own 13%. GVK will hold the remaining 10%.