AAI to offload residual stake in Bangalore and Hyderabad airports

 Sale of 13% stake in each may fetch Rs 3,000 crore

The Airports Authority of India (AAI) has decided to sell the 13 per cent stake it holds in Kempegowda International Airport Bengaluru (Bangalore International Airport, or BIAL) and GMR Hyderabad International Airport (GHIAL) to raise funds.

The authority will soon appoint a transaction advisor to conduct a valuation of AAI’s stake in the two airports in which Prem Watsa-owned Fairfax Group and Delhi-based GMR Infrastructure (GMR Infra) hold the largest stake.

According to the shareholding agreement, the largest shareholders have the first right of refusal on the stake. Industry executives and analysts tracking the two firms said while Fairfax is a clear favourite to buy AAI’s stake, for GMR Infra — which has a consolidated debt of over Rs 25,000 crore and is selling assets itself — it may be challenging to buy the stake if the price is high.

Fairfax and Siemens hold 54 and 20 per cent stake in BIAL, while GMR Infra holds 63 per cent stake in GHIAL. The governments of Karnataka and Telangana each hold 13 per cent stake in the airports. “Since the authority holds minority stake in the two entities and has gained neither meaningful return from the two airports nor any say over the management, it has been decided to monetise the stake. A board resolution was passed recently. Accordingly, an advisor will be appointed. It will do a valuation and guide the process,” said a senior government official.

However, the official said there are no immediate plans to offload 26 per cent stake in Delhi International Airport (DIAL) or Mumbai Internatio­nal Airport (MIAL), given AAI holds 26 per cent stake in the two firms. This gives it the power to influence special resolutions, which require at least 75 per cent vote of shareholders. “For DIAL and MIAL, AAI is not a passive shareholder and has significant say over the capex planned, which is not the case for BIAL and GHIAL,” said a second official.