GMR Infrastructure Ltd said Tata Group, Singapore’s sovereign wealth fund GIC Pvt Ltd and private equity firm SSG Capital Management have agreed to invest Rs 8,000 crore in its airport unit.
CNBC-TV18 first reported about the deal on March 26.
The investment in GMR Airports Ltd gives the infrastructure company a fillip in its mainstay business, which is facing stiff competition from new entrants such as the Adani Group.
GMR Infra said it has signed an agreement under which Tata and GIC will infuse Rs 1,000 crore in GMR Airports, and will purchase GMR Airports' shares from GMR Infra and subsidiaries for Rs 7,000 crore, according to the release.
As part of the deal, GMR Infra will retain management control over the airports business, with the Investors having customary rights and board representation at GMR Airports and its subsidiaries.
Following the completion of the acquisition, GMR Indra will hold 54 percent stake in GAL, Tata will own 20 percent stake, GIC will hold 15 percent stake and SSG will own 10 percent stake, said the company.
The deal "will reduce our debt substantially, strengthening our balance sheet," said Grandhi Kiran Kumar, managing director and CEO, GMR Infra.
GMR, which has a debt of over Rs 20,000 crore, has been making efforts to monetise its business to raise funds to repay debt and a large portion of the funds raised will be used for that purpose. The parent company GMR Infrastructure currently owns 92 percent of GMR Airport. GMR currently operates the airports in Delhi, Hyderabad and Cebu (the Philippines) among others.