ADIA lends Rs. 6,300 crore to GMR

Proceeds from Abu Dhabi Investment Authority will be used for refinancing debt of GMR Enterprises

The transaction is subject to compliance with certain conditions and regulatory approvals. Upon completion, the GMR promoter group's pledge on its shareholding in GAL will reduce significantly

New Delhi: GMR Group on Wednesday said it has secured Rs6,300 crore debt funding from the Abu Dhabi Investment Authority (ADIA) and the proceeds will be used for refinancing debt of its promoter group entity GMR Enterprises Pvt Ltd (GEPL).

GEPL is the promoter of GMR Airports Ltd (GAL). The group operates three airports in India -- Delhi, Hyderabad and Goa -- and two airports in the Philippines and Indonesia. In a release, GMR Group said it has executed an agreement with a wholly-owned subsidiary of ADIA for Rs 6,300 crore investment in the structured debt instruments of GEPL. The transaction is subject to compliance with certain conditions and regulatory approvals. “Upon completion, GMR Group will use the proceeds of the transaction to refinance all external debt of GEPL, the promoter of GMR Airports Ltd. Also, upon the completion, the GMR promoter group's pledge on its shareholding in GAL will reduce significantly,” the release said. With the funding, the release said GEPL will also be able to consolidate multiple lenders into a single source of capital. GEPL is a promoter group entity controlled by GM Rao.

GMR Group Corporate Chairman Kiran Grandhi said that in recent years, it has successfully reduced a significant quantum of corporate debt.

“We have also demerged GMR Power and Urban Infra Ltd from GMR Airports Infrastructure Ltd, and merged GMR Airports Ltd with GMR Airports Infrastructure Ltd to form GMR Airports Ltd (GAL), a pure play, publicly listed airport platform. This investment from ADIA will facilitate the repayment of all external debt at GEPL, strengthening our ability to support the continued growth of GAL,” he said.

According to Executive Director of the Infrastructure Department at ADIA Khadem Al Remeithi, India's aviation sector has strong growth prospects, backed by the positive long-term fundamentals of the Indian economy. “This investment aligns with our approach of backing entities which are developing world-class transport assets that benefit from demographic growth and increased economic connectivity,” he added.