In the opening bell session, GMR Infra surged over 10% to Rs.21.45. Stock has been gaining for the last 2 days and has risen 19.30% in the period.
The company announced today morning that a consortium of a Tata group company, Singapore's sovereign wealth fund GIC and SSG Capital Management have agreed to invest around Rs 8,000 crore in its airports business.
The investment amount of Rs. 8,000 crore will consist of Rs.1,000 crore equity infusion in GAL and Rs.7,000 crore towards purchase of GAL’s equity shares from GIL and its subsidiaries.
Following the investment, GIL proposes to demerge its Energy, Highways, Urban Infrastructure & Transportation businesses, leading to separation of its Airport Business, which contributes 60% of the total revenue.
As part of the terms of the proposed investment, GMR will retain management control over the Airports Business with the Investors having customary rights and board representation at GAL and its key subsidiaries. The Investors have pegged 100% Equity Valuation for GAL at post money valuation of Rs.18,000 crore, along with earn-outs of up to Rs. 4,475 crore linked to achievement of certain agreed milestones and performance metrics over next 5 years. Thereby, total valuation assuming all Earn-outs are successfully consummated, will be Rs 22,475 Crores on Post Money Basis.
As part of this transaction, GMR also intends to provide exit to existing private equity investors who hold 5.8% Equity Stake in GAL. At Closing, GMR and its subsidiaries will hold 54% stake in GAL, Employee Welfare Trust will hold 2%, Tata will hold 20% stake, GIC will hold 15% stake and SSG will hold 10% stake.
The company has a net debt of about Rs 20,000 crore of which Rs.6800 crore comes from the airport business. This move is aimed at bringing down this debt and strengthening the balance sheet.