As part of its strategy to emerge a majority stakeholder in Bengaluru International Airport (BIAL), GVK Power and Infrastructure is making quick moves to acquire the 17% stake L&T has in the airport company. But for technicalities involved, GVK would have sealed the deal long back, a source tracking the developments said.
Zurich Airports, which had sold 12% stake in BIAL to the company’s subsidiary GVK Airport Developers Pvt Ltd recently, has the first right of refusal on L&T’s 17% equity. The right of refusal is set to expire by Friday midnight, 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.
GVK group chairman G V Krishna Reddy said in Bangalore they had already written to Zurich. “We have already given the letter to them (Zurich) to pick up, so that we will have an understating to see that ultimately we pick up that stake,” Reddy said.
GVK is also preparing to have a dialogue with both L&T and Zurich Airport on the proposal and conclude the deal at the earliest.According to sources, the L&T stake buyout would cost GVK Rs 550-600 crore.
Having picked up the 12% stake offered by Zurich Airport recently for Rs 480 crore, GVK has been working on a strategy to increase its stake to 51%. It is also looking at monetising real estate available with the company. 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. With this, the strategy of GVK to go up to 51% would take sometime.
“GVK is certainly looking at BIAL as a long-term opportunity. It (51% stake) happens when it happens. There is no hurry for the group. But, barring Siemens and Zurich, which still has 5% stake in BIAL, there is no one else to buy stake from since the Karnataka government and Airports Authority of India have 26%,” the source said.
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