GMR Airports International BV (GAIBV), a step-down subsidiary of GMR Infrastructure Limited and direct subsidiary of GAL, has entered into definitive agreements with Aboitiz InfraCapital Inc (AIC), for divesting stake in GMR-Megawide Cebu Airport Corporation (GMCAC).
GMCAC, a joint venture between GAIBV and Megawide Construction Corporation (MCC), is the developer and operator of the Mactan Cebu International Airport (MCIA). GAIBV and MCC have agreed to sell their existing stakes in GMCAC to accommodate the entry of AIC.
“We are happy to welcome and partner with Aboitiz InfraCapital (AIC) at Mactan-Cebu International Airport. With AIC’s deep expertise in the region, we are confident that Cebu Airport will reach new heights,’‘ Srinivas Bommidala, Business Chairman – International Airports, GMR Group said in a release.
The decision to divest stake in GMCAC is in line with GMR Airport’s strategy to focus on deleveraging and redeploying capital in high-growth opportunities, he said, adding: “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.’‘
The agreement involves GMCAC’s issuance of primary shares and transfer of secondary shares from Megawide and GAIBV to AIC amounting to PhP 9.5 bn, resulting in the latter owning 33 and 1/3 per cent minus 1 share stake in GMCAC.
Likewise, the transaction involves the issuance by Megawide and GAIBV of Exchangeable Notes for PhP 7.75 bn each aggregating to PhP 15.5 bn (Notes). The Notes will mature October 30, 2024 and will be exchanged by AIC for the remaining 66 and 2/3 per cent plus 1 share of GMCAC’s outstanding capital stock.
The transaction will be undertaken at an enterprise value of PhP 49.7 bn (₹705 crore) and GAIBV will receive an upfront PhP 9.4 bn (₹133 crore) 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, would be entitled to additional deferred consideration based on the subsequent performance,’‘ a release from GMR said.
A portion of the primary investment into GMCAC will be used for acquisition by it of identified entities providing services at Cebu Airport.
AIC is the infrastructure arm of the Aboitiz Group, recognized as the best-managed companies in the Philippines and in Southeast Asia. The transaction is subject to customary regulatory approvals in the Philippines.