Bengaluru: GVK Power and Infrastructure Ltd, which operates the Mumbai airport, has sold its remaining 10% stake in Bangalore International Airport Ltd (BIAL) to Fairfax India Holdings Corporation for Rs1,290 crore, the group said on Friday.
The transaction is expected to be completed by next month. GVK had sold a 33% stake to Fairfax in March 2017. The group said it was trying to reduce its debt.
“Notwithstanding this sale, the airports sector will continue to be a core focus area for GVK. We had entered BIAL in 2010 when the airport was going through a tough phase as the capacity was severely constrained. Over the last seven years we have worked very hard to transform BIAL into a world class airport. The airport is now ready for another phase of expansion with a new runway and a new terminal to be constructed. However, we have decided to part ways with BIAL as deleveraging is top priority,” GVK Reddy, founder chairman and managing director of GVK, said in a statement.
The Navi Mumbai airport for which the group won the contract this year will now be a priority.
“Our immediate focus will now be on Mumbai and Navi Mumbai airports and on selectively evaluating privatisation opportunities. The reduced debt burden gives us flexibility and releases management bandwidth to focus on these projects; capacity optimisation and real estate development will be the key focus areas for the existing Mumbai airport. The government’s focus on developing the aviation sector also presents attractive growth opportunities and we are evaluating these,” Reddy said.
The Navi Mumbai airport is expected to be built at a current estimate of Rs16,000 crore than what has been spent on the modernisation of Mumbai airport.
GVK Group has presence in the energy, resources, airports, transportation, hospitality and life sciences sectors.
The company posted a net loss of Rs205.85 crore in the fourth quarter ended 31 March, against a net loss of Rs105.59 crore in the year-ago quarter.
GVK shares rose 14.45% to end at Rs5.94 apiece at the BSE, while the benchmark Sensex rose 0.44% to end at 31,273.29 points.