GMR Group on Friday said it will divest its entire 40 per cent stake in Cebu international airport in Philippines for an upfront payment of Rs 1,330 crore as well as earnouts to be received over a period of more than four years.
The airport is being operated by GMR-Megawide Cebu Airport Corporation (GMCAC) and GMR Airports International BV (GAIBV) holds a 40 per cent stake in the venture.
A definitive agreement has been signed between GMR Airports International BV (GAIBV) and Aboitiz InfraCapital Inc (AIC) for the divestment of stake in Cebu airport.
AIC is the infrastructure arm of the Philippines-based Aboitiz Group.
According to a regulatory filing, the stake is being divested as part of the focus on deleveraging GMR Airports Ltd and churning assets for higher returns on investment.
"The transaction will be undertaken at an enterprise value of PhP 49.7 billion (Rs 70.5 billion) and GAIBV will receive an upfront amount of PhP 9.4 billion (Rs 13.3 billion) in lieu of the shares being transferred, and notes being issued.
"We would continue to operate as the technical services provider to GMCAC until December 2026, (and) would also be entitled to additional deferred consideration based on the subsequent performance of GMCAC for the same period," the filing said.
PhP refers to Philippine Pesos.
GMR Group won the Cebu airport project in 2014.
Srinivas Bommidala, Business Chairman – International Airports, GMR Group said the decision to divest stake in GMCAC is also in line with GMR Airport's strategy to focus on deleveraging and redeploying capital in high growth opportunities.
"Further, we have strengthened our position in the Asia Pacific Region by partnering with AP2 in developing and operating the Kualanamu International Airport at Medan, Indonesia," he added.
GMR Group is operating the airports at Delhi, Hyderabad and Bidar (Karnataka) apart from Cebu airport.
Among others, it is also developing airports in Greece and Indonesia.
GMR Airports International BV (GAIBV) is a step-down subsidiary of GMR Infrastructure Ltd and a direct subsidiary of GMR Airports Ltd.
