Indian conglomerate GVK has agreed to sell a 33% stake in Kempegowda International Airport in Bengaluru, India, to investment company Fairfax India Holdings Corporation as part of its plans to balance the company’s books.
Fairfax will purchase a stake in the airport operating company Bangalore International Airport Limited (BIAL) through its wholly owned subsidiaries in Mauritius for Rs22bn (US$330m). The transaction is subject to customary closing conditions and third party consent and is scheduled for completion by mid 2016.
BIAL was formed as a public–private venture to operate the airport under an initial 30-year concession agreement. At present, 26% of ownership is held by Indian government entities with the remainder held by private companies including GVK Group (43%), Siemens Project Ventures (26%) and Zürich Airport (5%).
Prem Watsa, chairman of Fairfax India and chairman and CEO of Fairfax Holdings, said, “We have great admiration for GVK in the outstanding work that has been done to develop Kempegowda International Airport to its current stature.
“This is a partnership between Fairfax and GVK. Going forward, we will work closely with all stakeholders to manage our stake in BIAL and will support G V Sanjay Reddy to continue to lead the management team as managing director of BIAL.
“While it is already a great facility, we look forward to its long-term expansion, to make it a vital infrastructure resource that will help drive India’s economic growth. The state of Karnataka is a major hub for tourism and commerce, and this airport serves as the gateway for leisure and business travelers alike.”
Dr GVK Reddy, founder chairman and managing director, GVK, said, “This is an important and successful milestone in deleveraging our balance sheet and all proceeds from this stake sale shall be used to bring down our debt obligations to our lenders.
“We chose Fairfax as a partner in BIAL as we have a long-standing relationship with Prem Watsa. We look forward to partnering with the company in developing Kempegowda International Airport through its next stage of expansion as we develop a new world-class Terminal 2 and a new runway.”
