GMR, Groupe ADP likely to jointly bid for future airport projects
Airport De Paris (ADP) and GMR Airports are likely to jointly bid for future airport projects, that is, greenfield, brownfield or management of airports.
Last year, the GMR Group concluded a deal to complete a 49 per cent stake sale in its airport arm to Paris-based Groupe ADP — the operator of Paris airport and one of the largest airport companies in the world — for Rs 10,780 crore.
The Centre is looking to privatise at least 13 airports immediately and the GMR-Groupe ADP combine is set to be a strong contender in this field.
The two companies have finalised a business agreement under which both will collaborate on multiple sectors, including engineering and project management, airport operations and passenger experience.
GBS Raju, chairman, airports, GMR Group, said the partnership between GMR and ADP will build an airport alliance in the world that will handle 325 million passengers annually.
“Together, we seek to bring unique experiences and concepts to the aviation industry that will build upon the combined expertise, innovation and vision of both partners. We believe this partnership will strengthen our respective airport platforms and enhance our competitiveness to seek opportunities for profitable growth of both ADP and GMR,” he said.
Industry experts said that with Groupe ADP and GMR Airports forming a loose joint venture, it will help GMR attract more European airlines to Delhi, and make it an Asia hub for all European travellers.
Similarly, it will also be beneficial for the greenfield airport at Goa that GMR is currently constructing. “Goa is a very well received tourist destination for travellers from Europe, especially Russia and Britain. We are currently in dialogue with certain airports, which are under ADP, to see how we can facilitate travellers from Turkey and Europe into Goa, as and when the new airport opens,” said Saurabh Chawla, executive director (ED), finance and strategy at GMR group, during a recent call with analysts.According to the share purchase agreement of Groupe ADP’s acquisition of stake in GMR Airports, the acquisition was conducted in two stages. The first stage, for a 24.99 per cent stake sale, was carried out in February 2019.
The second phase was completed last year in two parts: The first part entailed an amount of Rs 4,565 crore, including Rs 1,000 crore equity infusion into GMR Airports, which was paid by Groupe ADP.
The second part involves earn-outs amounting to Rs 1,060 crore, subject to the achievement of certain performance-related targets by GMR Airports till FY24.
As part of the terms of the transaction, GMR Group will retain management control over the airports with Groupe ADP having the customary rights and board representation at GMR Airports and its key subsidiaries.