GVK soon to close stake sale in airports business

Hyderabad-based diversified infra group GVK is likely to finalise stake dilution in its airport business over the next couple of months and the proceeds will be used to clear Rs 2,500-crore (Rs 25 billion) non-operational debt.

GVK operates Mumbai and Bangalore airports.

The company also ruled out taking the airport arm public as stake dilution to other investors will be the priority.

"Over the next few months we will see some results as we have been in talk with several investors to dilute the stake in the airport business," GVK Power and Infrastructure Vice-Chairman and Managing Director of Mumbai International Airport G V Sanjay Reddy told reporters over the weekend after the launch of Terminal 2.

Reddy said investors have evinced interest in the group's airport business, adding the process is expected to be completed in the next two months.

The proceeds from the partial stake sale will be utilised  to settle the around Rs 2,500

crore debt in the airport arm, Reddy said, adding the priority will be to dilute stake in the Bangalore airport JV.

After missing several deadlines in the past three years and incurring over 32 per cent cost escalation, the new international terminal (T2) at the Mumbai airport was inaugurated by Prime Minister Manmohan Singh on January 10. The commercial operations, however, is expected only from February 12.

Reddy said after the launch of the world-class T2, GVK will first look at stabilising the airport operations and in the first year the focus will be on achieving service standards.

To a question on the proposed Navi Mumbai Airport, which has secured all regulatory approvals, Reddy said his group will be looking at participating in the bidding.

He said the group will also bid for six other airports which the government is planning to hand over to the private players for operations and management.