GMR Infra gets favourable verdict on Axis Bank debt arbitration in Maldives

MUMBAI: GMR Infrastructure got a big relief in its ongoing arbitration in Maldives after the tribunal there ruled that the damages to be paid by the government of the country and Maldives Airport Company for dismissing the company from running the Male airport will also include sums owed to Axis Bank Singapore for the project.

In 2012, by the government of Maldives and Maldives Airport Company terminated the concession agreement with GMR Infrastructure's arm GMR Male International Airport (GMIAL) alleging that it was void ab initio and initiated an international arbitration. In 2014, the international arbitration tribunal ruled in favour of GMR. Axis Bank-led consortium initiated a legal action to recover their dues.

"By its Award dated 23rd February 2016, the said Tribunal has ruled that such damages payable by government of Maldives and MACL to GMIAL will also include all the sums owed by GMIAL to the project lenders Axis Bank Singapore Pte under the facility agreement," GMR said in a statement.

Axis Bank leads a consortium of lenders, which includes Indian Overseas Bank and Indian Bank, with exposure to the airport project. The $511-million project has a debt component of $358 million.

"The project debt covered by the aforesaid ruling as part of damages is besides the other damages/compensation payable by government of Maldives and MACL to GMIAL in terms of the first part final award," the statement said.

The quantum assessment of the entire damage to be paid by Maldives' government and MACL is expected to be completed by the end of the third quarter of 2016. GMR had invested up to $230 million in the project including $78 million that it had paid upfront after it won the bid in 2010. The debt-equity ratio was 70:30, with Axis Bank-led consortium providing most of the debt.

GMR Group

Axis Bank