GVK offers to sell stakes in Mumbai and Bangalore airports to JSW Group

25 February 2016 (Last Updated February 25th, 2016 18:30)

India-based GVK Group has reportedly offered to sell its controlling stakes in the Mumbai and Bangalore airports to JSW Group.

India-based GVK Group has reportedly offered to sell its controlling stakes in the Mumbai and Bangalore airports to JSW Group.

The Economic Times reported that GVK Group vice chairman and managing director of Mumbai International Airport Limited (MIAL), Sanjay Reddy recently met JSW managing director Sajjan Jindal to discuss on the matter.

A source was quoted by the publication as saying: "Airports are iconic assets that act as gateways to key cities.

"This is a unique opportunity for the JSW corporate brand perceived largely as industrial in nature to change into one with strategic consumer connect and visibility."

"So this is a unique opportunity for the JSW corporate brand perceived largely as industrial in nature to change into one with strategic consumer connect and visibility."

Sources close to the matter were cited by Livemint as saying that the talks are at a very 'nascent stage' as the JSW Group 'is still studying the proposal'.

The GVK Group is currently burdened with a net group debt of Rs265bn ($3.8bn) in fiscal 2015, and has been looking for various money-raising options that include an initial public offer (IPO) and the sale of its stakes to private equity firms.

A wholly owned subsidiary of the GVK Power and Infrastructure, GVK Airport Developers has a majority stake of 50.5% in MIAL and a 43% stake in BIAL.

MIAL reported a revenue of Rs6,946.6m ($101m) for the quarter ending 31 December, against Rs6018.6m ($87.5m) for 2015, an increase of 15.4%.

Bangalore International Airport Limited (BIAL) also recorded a revenue of Rs2896.8m ($42.1m) for the quarter ended 31 December, against Rs2427.2m ($35.3m) for the last year. BAIL reports an increase of 19.3%.