GMR Airports Infrastructure has said it has completed the composite scheme of amalgamation and arrangement with GMR Airports and GMR Infra Developers with the former.
The merger marks a significant milestone in simplifying GIL’s corporate structure and strengthening its position to capitalise on the aviation growth story. This strategic move aims to enhance shareholder value by creating a pure-play airport company, the company said in a statement.
Pure-play airport company
With an objective of enhancing shareholders value, the firm has embarked on a journey in 2020 of creating a pure-play airport company, it said.
Strategic partnership and demerger
- In early 2020, GIL entered a strategic partnership with Groupe ADP, wherein Groupe ADP acquired a 49 per cent stake in GAL to establish a world-class airport platform.
- On December 31, 2021, GIL successfully completed a demerger of its non-airport business into GMR Power and Urban Infra (GPUIL), making GIL the only pure airport play listed entity in India.
Completion of the merger
Previously, GIL owned 51 per cent of GMR Airports, representing the entire airport business. Post-merger, GIL now owns 100 per cent of the airport business, and Groupe ADP, a 49 per cent shareholder in GAL, becomes a shareholder of GIL.
Shareholding pattern post-merger
Post-merger, GMR Group remains the largest shareholder of GIL with 33.8 per cent, Groupe ADP holds 32.3 per cent, and the public owns 33.9 per cent of the paid-up equity share capital.
GIL issued 3,41,06,14,011 equity shares to Groupe ADP, alongside 260,44,40,880 Optionally Convertible Redeemable Preference Shares (OCRPS).
The total paid-up equity shares now stand at 10,55,89,75,952, with a derived market capitalization of Rs 99,518 crore (USD 11.9 billion) based on the closing share price of Rs 94.25.
“Post completion of the Merger, GMR Group would continue to have management control over the merged GIL,” the company said.
Benefits of the merger
- Airport assets are now closer to GIL shareholders with the cessation of GAL.
- Enhanced corporate governance with the induction of Groupe ADP directors.
- Improved profitability and cash flow efficiency, leading to additional Free Cash Flow to Equity (FCFE) at the GIL level.
- Increased market capitalisation of GIL, potentially leading to inclusion in additional indices and attracting equity flows from passive funds and long-term investors.
- Strengthened balance sheet, facilitating greater access to growth capital at a lower cost.
Recent corporate actions
- Consolidation of GIL’s stake at Hyderabad Airport (GHIAL) from 63 per cent to 74 per cent by acquiring a stake from Malaysian Airports.
- Conversion of KIA FCCB into equity shares, with outstanding interest waived.
- Completion of the merger.
“The merger signifies a transformative event and marks a significant step forward in our growth strategy, enabling us to expand our reach and capabilities in serving all the stakeholders including shareholders, employees, passengers and airlines alike. I am confident that together, we will capitalize on synergies, innovate in service delivery, set new benchmarks in the industry and maintain our leadership position in the airport business,” GM Rao, Chairman, GMR Group said.
Commenting on the development, Kiran Kumar Grandhi, Corporate Chairman said, “As envisaged earlier in 2020, to simplify the corporate structure and strengthen balance sheet, this merger is the final step in the right direction, executed in a timely manner. This milestone represents a strategic step towards positioning GIL for the next stage of growth. We look forward to leveraging the combined strengths of the GMR Group and Groupe ADP to deliver superior experiences for our customers and stakeholders.”
