The consortium of GMR Infrastructure, Tata Group, GIC, and SSG Capital is nearing towards the last leap of closure. The shareholders have signed the agreement, and Tata Group, GIC, and SSG Capital are seeking approval from the Competition Commission of India (CCI).
Once into motion, the consortium will handle the entire airport business of GMR Infrastructure, located both in India and abroad.
The three partners, Tata Group, GIC and SSG capital, would together invest INR 8000 crores in the airport unit. GMR Infrastructure will utilize this fund to reduce its debt that currently stands at INR 20,000 crores.
While Tata Group will receive 20% of the stake in the new business, GIC and SSG Capital will have 15% and 9% respectively. GMR Infrastructure will continue to remain as the major shareholder with 54% of the share. The employee welfare trust will hold the remaining 2%. GMR will continue to run as the management. The new partners will find a place on the board.
The three partners have estimated the value of GMR airports at INR 18 crores. The expected earnings based on certain milestones over the next five year will add another INR 4475 crores, which together make the total value of INR 22475 crore. The performance milestones include airports’ business achievements on duty-free shops, commercial real estates, etc.
While the consortium is nearing its formation, a committee of GMR Infrastructure is working on a tax-efficient structure for offloading equity to the three new partners. The committee will also frame a mechanism to make the functioning of GMR Airports Ltd.