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GMR Infra gearing for an exit from Turkish airport

June 08, 2013 15:46 IST

The Bangalore-based publicly-held infrastructure developer, GMR Infra, is understood to have kick-started the process to exit from the Istanbul Sabiha Gokçen International Airport, which it manages in Turkey.

In this project, the company holds 40 per cent stake, involving a capital expenditure of $550 million, since May 2008. While GMR is understood to have invested a little over $60 million as its equity share in the company, senior GMR Group officials say they will be looking to realise at least 1.5-2 times their investment.

Photograph: B Mathur/ReutersThat translates into a little over $100 million, as and when an exit is structured. Senior GMR Group management officials said this exit was part of the articulated strategy the company embarked upon mid last year. The strategy mainly is 'develop-build-create value-divest'. An official GMR Infra spokesperson, however, declined to comment, saying it was speculation.

During the year ended March 2013, the airport, which has a capacity to handle 25 million passengers annually, saw a traffic of 15.34 million passengers, growth of 11 per cent from 2011-12. Its revenue for 2012-13 grew 30 per cent from the previous year to Rs 325 crore (Rs 3.25 billion). But the company’s loss in the year stood at Rs 123 crore (Rs 1.23 billion), an increase of 18 per cent from that in 2011-12, mainly on account of a 14 per cent increase in financing costs.

GMR Infra’s exit from this project, expected this year, will mark the company's waning global presence after a very aggressive expansion. Early this year, the company exited its 70 per cent stake in a gas-fired power project in Singapore, realising around $125 million. Later, it also sold its stake in coal mines in South Africa, raking in around $50 million.

Besides Turkey’s Istanbul Sabiha Gokçen International Airport, GMR Infra has presence in Indonesia, too. It holds stakes in two coal mines with an investment of close to $600 million.

The company has, over the past two years, divested its stake in Intergen Global power project, making close to $900 million. Late last year, it also saw an unceremonious exit from the Male International Airport, which involved a total outlay of $500 million, over alleged irregularities during the bidding process and for levying development fees. It is understood GMR is now gearing up to bid for an airport project in Philippines, with a total outlay of $400 million.

Divestments

GMR’s shift to an asset-light-asset-right strategy

2013

Sells 70% stake in a gas-fired power project in Singapore, unlocking Rs 1,600 crore

Exits its holding in South African coal mines, realising around $50 million

Divests 74% stake in GMR Jadcherla Expressways for Rs 195 crore

2012

Forced out of the $500-million Male International Airport... arbitration on in Singapore

2011

Exits its 50% stake in Intergen for $900 million

Raghuvir Badrinath in Bangalore
Source: