A consortium led by GIC Private Limited including a Tata Group entity and SSG Capital Management are likely to buy 40 percent stake in GMR Airport's arm for around Rs 8,000 crore, sources privy to the developments told CNBC-TV18.
A substantial portion of the 40 percent stake is likely to be bought by GIC Private Limited, a sovereign wealth fund established by the Singapore government in 1981 to manage the country’s foreign reserve.
SSG Capital Management, founded by ex-Lehman Brothers executives, was set up in 2009 and it specialises in distressed and special situation investments.
According to sources, Tata Group’s infrastructure arm is likely to make a minor strategic investment in GMR Airports. "The group's investment in the aviation sector is restricting them from buying a large or controlling stake in an airport due to regulatory issues," they said.
In terms of the valuation of the deal, GMR’s Airport arm is valued at around Rs 20,000 crore, which is slightly lower than the valuation at which the private equity investors had settled with the Bengaluru-based company last year.
It was expected that GMR will be raising funds through an IPO of the airport business at a higher valuation. However, with this investment, IPO plans may be shelved for the moment.
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.
On March 26, GMR Infrastructure’s stock surged over 15 percent in trade on the back of expectation of fund infusion. When contacted GMR, Tata Group, GIC and SSG did not offer any comment on the deal details. CNBC-TV18 has learned that the deal announcement is likely soon.