GMR Airports Infrastructure Limited (GIL) announced the approval of the composite scheme of amalgamation and arrangement of GMR Airports Limited (GAL) with GIL by its board (Merger). It would borrow Rs. 2,900 crores from Aéroports de Paris SA (Groupe ADP) for a 10-year period. GMR Group will continue to be GIL’s single largest shareholder and will retain management control.
In early 2020, GAL will enter into a Strategic Partnership with Groupe ADP to build a world-class airport platform, with Groupe ADP agreeing to purchase a 49% interest in GAL. Groupe ADP had targeted equity earnouts of 8% of GAL and cash earnouts of 1,060 Cr to GIL at the time of the acquisition.
Aéroports de Paris and GMR Airports Infrastructure Ltd. decided to merge their joint venture, giving ADP a liquid holding in an Indian airfield company. ADP and GMR Airports Infrastructure own 49% and 51% of the unlisted GMR Airports Limited, respectively.
The merger of GMR Airports Infrastructure and GMR Airports will simplify the unlisted company’s capital structure, allowing the combined organization to more easily grab new business, according to the companies.
According to the corporations, the merger will take place in the first half of 2024. ADP would own 45.7% of GMR Airports Infrastructure and GMR Airports combined.
ADP will invest €331 million ($353 million) in GMR Airports Infrastructure foreign currency convertible bonds, with the proceeds used by the Indian company to clear its balance sheet by retiring corporate debt and settling a significant portion of its liabilities. According to ADP, the investment will result in a cash expense of the same amount in the coming weeks.