GMR to sell its entire stake in the Philippine airport

Airport operator GMR Group announced that it would sell its entire 40% stake in Cebu international airport in the Philippines in exchange for an upfront payment of Rs. 1,330 crore and earnouts to be received over the course of more than four years.

GMR to divest stake in Philippines airport

Separately, the Board of GMR Infrastructure authorised the issuance of foreign currency convertible bonds or any other security to raise up to Rs 6,000 crore in funds. GMR Power and Urban Infra, a different GMR group company, approved the raising of up to Rs 3,000 crore in new capital on Thursday.

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The money will be applied to the group’s infrastructure projects. On commercial land available near its airports in Delhi, Hyderabad, and Goa, group company GMR Airports is building airport cities. With regard to the sale of its stake in Cebu Airport, GMR Airports International BV (GAIBV), a stepdown subsidiary of GMR Infrastructure (and a direct subsidiary of GAL), has agreements in place for Aboitiz InfraCapital (AIC) to purchase shares of GMR-Megawide Cebu Airport Corporation (GMCAC).

Mactan Cebu International Airport developer and operator GMCAC is a joint venture between GAIBV and Megawide Construction Corporation (MCC) (MCIA). According to a regulatory filing, the stake is being sold in order to deleverage GMR Airports and repurpose assets for investments with higher returns.

In lieu of the shares being transferred and the notes being issued, GAIBV will receive an upfront payment of Rs 13.3 crore, according to the Airport operator filing. The transaction will be carried out at an enterprise value of PhP49.7 billion (Rs 7,050 crore), the Philippine Peso, or PhP.

“We would continue to serve as GMCAC’s technical services provider through December 2026, and we would be eligible for further deferred consideration based on GMCAC’s performance in the future for the same time period.”

The deal

In exchange for the shares being transferred and the notes being issued, the transaction will be carried out at an enterprise value of PhP49.7 billion (Rs 7,050 crore), and GAIBV will receive an upfront payment of Rs 1,330 crore.