GMR Airports to sell stake in Mactan Cebu International Airport
GAIBV and MCC have agreed to sell their existing stakes in GMCAC in order to accommodate AIC's entry
HYDERABAD: GMR Airports International BV (GAIBV), a stepdown subsidiary of GMR Infrastructure Limited, has entered into a definitive agreements for AIC to acquire shares in GMR-Megawide Cebu Airport Corporation (GMCAC). The award-winning Mactan-Cebu International Airport is developed and operated by GMCAC, a joint venture between GAIBV and Megawide Construction Corporation (MCC) (MCIA). GAIBV and MCC have agreed to sell their existing stakes in GMCAC in order to accommodate AIC's entry.
According to the agreement, AIC will own 33 and 1/3% minus 1 share stake in GMCAC once GMCAC issues main shares and transfers secondary shares worth PhP 9.5 billion from Megawide and GAIBV to AIC. Along with the aforementioned, the transaction also entails the issue of exchangeable notes by Megawide and GAIBV for PhP 7.75 billion and PhP 15.5 billion, respectively (Notes). The Notes will mature on October 30, 2024, and AIC will exchange them for the remaining 66 and 2/3% plus one share of GMCAC's outstanding capital stock.
In lieu of transferring shares and issuing notes, the transaction will be carried out at an enterprise value of PHP 49.7 billion (INR 70.5 billion), and GAIBV will receive an upfront payment of PHP 9.4 billion (INR 13.3 billion). Up until December 2026, we would continue to serve as GMCAC's technical services provider. We would also be eligible for additional deferred consideration based on GMCAC's subsequent performance for the same time period.
A portion of GMCAC's initial investment will be used to acquire identified entities providing services at Cebu Airport.AIC is the infrastructure arm of the Aboitiz Group, which is recognised as one of the best-managed companies in the Philippines and Southeast Asia. AIC aims to build purpose-driven infrastructure and serve as one of the building blocks of the country's economy. The company develops and operates economic estates, water facilities, digital infrastructure, and transport and mobility projects that enable businesses and uplift communities.
Mr. Srinivas Bommidala, Business Chairman – International Airports, GMR Group, said, "We are happy to welcome and partner with Aboitiz InfraCapital (AIC) at Mactan-Cebu International Airport. In the last 8 years, we have completed the expansion plan and have been one of the fastest growing airports in the region, which has led to steady returns. With AIC's deep expertise in the region, we are confident that Cebu Airport will reach new heights. The decision to sell our stake in GMCAC is also consistent with GMR Airport's strategy of deleveraging and redeploying capital in high-growth areas. Further, we have strengthened our position in the Asia Pacific Region by partnering with AP2 in developing and operating the Kualanamu International Airport at Medan, Indonesia. "