Close on the heels of buying Zurich Airport’s 12% stake in Bengaluru
International Airport (BIAL), the Hyderabad-based GVK Power and Infrastructure, is making quick moves to strengthen its hold over the airport by pitching for 17% equity held by Larsen & Toubro (L&T).
But for the technicalities involved, GVK would have sealed the deal long back, a source tracking the developments said. Zurich Airport has the first right of refusal (RoFR) on L&T’s 17% stake. The right of refusal is set to expire Friday night. Post this technicality, L&T’s stake after which the stake is open for anyone to buy.
Sources said GVK is already in talks with L&T to buy the stake, though this could not be confirmed.
A source said GVK might get Zurich Airports to buy the stake from L&T before the right of refusal expires and transfer it to its name. “Once the right of refusal ends, GVK might face some competition from other potential buyers. Making Zurich buy the stake could be one strategy to avoid competition,”the source said. While GVK officials were not available for a comment, GVK group chairman G V Krishna Reddy said in Bangalore that they had already written to Zurich expressing its interest to buy L&T’s stake. According to sources, the L&T stake buyout could cost GVK Rs 550-600 crore. Apart from a strategy to increase its stake to 51%, GVK is also working on a plan to monetise real estate around the BIAL, a source said. Once it manages to conclude the deal on L&T's holding, GVK's stake in BIAL would increase to 29%.
Siemens, which leads the consortium managing the BIAL, has about 40% stake in it. However, with certain lock-in clauses, Siemens would be able to divest only up to 14% initially, though it would be able to sell off up to 26% after five years. The strategy of GVK to hold 51% in BIAL would take sometime. But GVK is in no hurry, said another source.
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