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Rediff News  All News  » Business » Prague airport revamp on GMR radar

Prague airport revamp on GMR radar

November 30, 2007 10:51 IST
GMR Infrastructure, the co-developer of Delhi International Airport (DIAL) and Hyderabad International Airport (HIAL), is looking at bidding for privatisation of Prague airport in the second half of 2008, one of the more profitable state-run enterprises in East Europe.

If it does finally win the bid, it will be one of the first instances of an Indian private sector company being involved in a state-level privatisation exercise in Europe.

The company is stepping up its international operations. Earlier this month, the company hired Ranjit Murugason, former global head of transport and infrastructure at ABN Amro, as its CEO for the international business division, to be based in London. The London office is in the process of being set up.

GMR sources said that it was too early to speak about the Prague development but confirmed that the bidding preparations were on.

Earlier this year, the company, as part of a consortium where it holds 40 per cent stake, has won the bid for Sabiha Gokcen International Airport (SGA) at Istanbul (Turkey) amid intense competition from global firms for a total concession fee of Euro1.93 billion (Rs 10,808 crore) for a period of 20 years.

Credit Suisse has been selected by the finance ministry of the Czech Republic to advise on the method of privatisation of the Prague airport operator Letiste Praha, while Deloitte Advisory will help the ministry to select the way to privatise Czech Airlines.

Proposed methods for sale of the airport are expected to be presented to the government by March next. The options of privatisation include a lease of the airport, its sale as a whole and sale of part of its shares on the bourses. 

The decision on a new owner or lessor should be taken by 2008 end. The airport is one of the most successful Czech companies still controlled by the state.

The firm ended last year with net earnings of nearly Kc1 billion and privatisation proceeds are estimated at Kc70-100 billion.

Miroslav Dvorák, chief executive officer of Prague Airport, recently hired two experts to the company's management to help with the successful privatisation of this state enterprise, which handled close to 12 million passengers last year.

Anjuli Bhargava in New Delhi