GMR to spend $75 mn of bond money on Hyderabad airport expansion

GMR Hyderabad International Airport Limited(GHIAL) will utilise $75 million (close to Rs 490 crore) out of the total $350 million (Rs 2,276 crore) that it has raised in the international bond market on capital expenditure for the airport expansion. The rest of the proceeds will be used to refinance the existing debt.

GMR Airports Limited president Sidharath Kapur on Monday elaborated on the fund utilisation plan of the subsidiary company after broadly indicating the purpose of $350 million bonds issue couple of days ago.

While the exact capex requirement was not yet spelt out by the company pending regulatory approvals for the proposed airport expansion plan, the allocation of $75 million comes as a first move towards the stated purpose.

The India Ratings & Research, a Fitch group company, earlier this year estimated that it may require about Rs 2,500 crore to expand the capacity to 20 million passengers per annum from the present 12 million, a level the actual passenger traffic had surpassed by a huge margin last year itself.

Last year, GHIAL CEO S G K Kishore said that the proposed capacity expansion would be achieved in a period of over 2-3 years.

In an interview to CNBC TV 18, Sidharath Kapur also clarified that GMR would look at selling only 12 per cent stake in GHIAL if and when it decides to go for equity dilution as the company would like to retain a minimum 51 per cent stake.

GMR holds 63 per cent equity while the Airports Authority of India (13 per cent), Telangana government(13 per cent) and Malaysia Airports Holdings Berhad (11 per cent) hold the remaining stake in GHIAL.

"We will think of monetising the equity at a right time. As of now there is no definitive plan, nor are we discussing with anyone for now," Kapur said.

He said the overall trajectory of debt with airport subsidiaries was pointing downwards. According to him, Delhi (DHIAL) and Hyderabad(GHIAL) airports together carry about Rs 7,500 crore debt. Of this debt in GHIAL books stand at about Rs 2,000 crore, which would be mostly restructured with the proceeds of the bond issue.

The 9-year old greenfield Hyderabad International Airport was built by GMR-led concessionaire at an investment of close to Rs 2,500 crore.

GMR Group