The approval was given to TUTPL which is a subsidiary of Tata Realty and Infra which in-turn is a wholly-owned subsidiary of Tata Sons; Valkyrie, an affiliate of GIC Private Limited and Solis, an investment vehicle of the SSG group.
The deal will bring Rs 8,500 crore to the company. The stake sale will give Tatas a stake of about 20% in the airport holding company, while GIC and SSG will hold about 15% and 10%, respectively. GMR Infra's stake will come down to about 54% while an employee welfare trust will hold about 2%.
The consortium has valued GMR Airports at Rs 18,000 crore. This, added to 'earn-outs' of up to Rs 4,475 crore over the next five years, will take the total value to Rs 22,475 crore after the stake sale is consummated. Achieving of the earn-outs will increase GMR's stake from 54% to about 62%, after the current PE investors SBI Macquarie, Standard Chartered Private Equity and JM Financial Old Lane exit, releasing their current stake of 5.8% in the group. It is also likely to alter the consortium's stake by a minor margin.
Earn-outs are in the nature of estimated earnings based on certain performance milestones agreed upon between the management and investors. These milestones include performance of its duty-free business, commercial real estate, etc., that the company can achieve over the next 5 years.
The fund infusion will include Rs 1,000 crore in fresh equity in GMR Airports. The rest will be towards the purchase of stake from GMR Infra and its subsidiaries.
The new investors led by Tatas
will find representation on the board, but the management will continue to be run by GMR. GMR plans to demerge its airport business to unlock value for shareholders.
The Tata group has 44% of the consortium. The stake purchase will pave the way for the second corporate biggie after the Adanis to enter India’s airport sector this year.
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