GMR Infrastructure Limited (GIL) announced a proposed investment by Tata Group “Tata”, an affiliate of GIC, Singapore’s sovereign wealth fund “GIC” and SSG Capital Management “SSG” (“Investors”) in its Airports Business.

GIL has signed a binding term sheet with the Investors pursuant to which the Investors have agreed to invest Rs. 8,000 Crores in GMR Airports Limited (“GAL”). The investment amount of Rs. 8,000 Crores will consist of:

♦  Rs. 1,000 Crores equity infusion in GAL; and

♦  Rs. 7,000 Crores towards purchase of GAL’s equity shares from GIL and its Subsidiaries.

The proposed investment is subject to definitive documentation, customary regulatory approvals, lender consents and other approvals.

Following the investment, GIL proposes to demerge its Energy, Highways, Urban Infrastructure & Transportation businesses, leading to separation of its Airport Business, subject to customary consents, regulatory & corporate approvals.

This is a significant development for GIL with multiple strategic benefits: -

♦  Significant deleveraging at GIL.

♦  Investment by marquee investors for creating a world class portfolio of Airport assets.

♦  Paves the way for restructuring of the business by way of demerger.

As part of the terms of the proposed investment, GIL will retain management control over the Airports Business with the Investors having customary rights and board representation at GAL and its key subsidiaries.

The Investors have pegged 100% Equity Valuation for GAL at:

Post Money Valuation of Rs. 18,000 Crores