GVK to buy 14% more in Bangalore Airport

K V GVK Power and Infrastructure is increasing its stake in Bangalore International Airport Ltd (Bial). The company that has 29% stake in Bial through its step-down subsidiary, Bangalore Airport & Infrastructure Developers Pvt Ltd, is planning to acquire another 14% holding from Siemens Project Ventures. This will take GVK’s stake in the airport to 43%.

Siemens currently holds about 40% stake in Bial. About 14% of Siemens’ total holding in Bial has been released from lock-in in June 2011.

“GVK has stated its objective of gaining a majority stake in Bial. However, because of the lock-in, the process could not be pursued. Only in June 2011, Siemens’ 14% holding has come out of the lock-in. The balance would get released sometime during 2013-14,” a company official said.

GVK has agreed to buy 53,844,000 shares from Siemens amounting to 14% equity at a price of Rs114 per share. For this, GVK would pay about Rs614 crore. However, the source of funding has not been disclosed by the company.

GV Krishna Reddy, chairman, GVK Power, said, “This will be a key strategic development for us to further underscore our commitment to the airport sector in India.”

GVK had acquired a 17% stake in Bial from L&T in December 2009 for Rs686 crore. Another 12% stake was bought by GVK from Zurich Airport for Rs484.6 crore. In both these deals, the value of each of the shares was pegged at Rs105 per share. Siemens has found some appreciation with Rs114 a share deal.