Funds infusion by Tata, others to be used to reduce debt, says GMR Group

The fund infusion by Tata Group and Singapore's GIC into GMR Group will be used to reduce the debt of the infrastructure firm. CCI on Tuesday gave its approval for stake purchase in GMR Airports by the Tata group and other entities, subject to some modifications in the proposed deal.

“This week we have received an approval from competition commission (CCI) and we expect about Rs 8,000 crore to come into the airport platform which is GMR Airports Limited,” said Saurabh Chawla, ED - Finance & Strategy, GMR Group.

GMR Airports owns and operates different airports in the country including Delhi and Hyderabad airports. It will also operate some of the upcoming airports both in India as well as overseas.

“Out of the Rs 8,000 crore, Rs 7000 will come in the form of secondary sale and that money will be primarily used to reduce corporate debt. Rs 1,000 crore will come as a primary issuance by GMR Airports Limited again to reduce debt. So the monies will be primarily used to reduce the corporate debt of consolidated GMR group," said Chawla in an interview with CNBC-TV18.

Chawla said the group has a total debt of Rs 22,500 crore as of Q1 of this financial year.

Going forward, the group plans to divest some other assets, especially highways. The group is also looking at many other opportunities of divestment to reduce debt on an accelerated platform, he said, adding that next 6-9 months would be a busy period in terms of divestments.

With regards to shareholders of the airport business, he said, “The agreements that were signed are for 44 percent of airport platform business being held by the Tata GIC consortium and around 56 percent to be held by GMR.  Our shareholding, which is GMR shareholding in the airport platform should go up to 62 percent that is the current agreement in place.”