MUMBAI: German airport developer Fraport AG is making a fresh attempt to exit a GMR Infra-led consortium that runs the Delhi Airport, by selling its 10% stake in it, said two people aware of the talks.

The latest round of talks has been on for the last four months. GMR has placed an offer on the table, but Fraport is yet to accept it, said one of the people without elaborating.

Fraport has also approached the state-run National Investment and Infrastructure Fund (NIIF) to buy its stake. NIIF, along with Gulf sovereign wealth fund Abu Dhabi Investment Authority (ADIA) and Canada’s PSP Investments last year signed a pact with GMR’s rival GVK Group to invest Rs 7,614 crore in the latter’s airport business.

GMR owns 64% in Delhi International Airport Ltd (DIAL), while the Airports Authority of India (AAI) owns 26%. Fraport owns the remaining stake in the consortium.

Spokespersons at GMR and Fraport said they wouldn’t comment “on speculation”. NIIF didn’t respond to queries before the story went to press.

This is the latest of Fraport’s attempts in the last eight years to exit the consortium. Senior executives in the company had publicly announced its intentions of an exit in 2012.

There had also been advanced talks for a stake sale in 2016. The attempts to exit were unsuccessful, in some instances over differences in valuation and at others over GMR’s own funding problems. Fraport picked up a stake in DIAL in 2006 as part of the consortium that won the award to develop a greenfield airport in Delhi.

GMR has the right of first refusal on any exit that Fraport would plan. This means it will need a go ahead for any stake sale.

“GMR may choose to match a price it gets from any other investor such as NIIF or let Fraport go ahead with its deal,” said one of the people cited above.

Fraport is the owner and operator of the Frankfurt airport, Germany’s biggest. Last year, it sold its 30% stake in the Hannover airport, Germany for 109 million euros.

In its AGM in May, company executives gave a guidance of consolidated earnings ranging between ¤420 million to 460 million euros in 2019. It had posted consolidated earnings of ¤506 million in 2018, up 40.6% on the previous year.

Fraport’s move comes at a time when GMR is awaiting a Rs 8,500-crore investment from the Tata Group, Singaporean sovereign wealth fund GIC and Hong Kong’s SSG Capital Management in its airports business.

The move hit a hurdle last year on a rule that mandated that an entity owning a stake in an Indian airline can’t own more than 10% in a local airport. Tata Sons owns close to half of two Indian carriers Vistara and AirAsia and the earlier proposed 20% stake in GMR’s airports business would give it a 12.8% stake in DIAL. Sources have said the Tatas have agreed to taper the shareholding to 15%.





Source link