GMR to sell entire 40% stake in Istanbul airport to Malaysia Airport for $308M

GMR Infrastructure Ltd is selling its 40 per cent stake in Istanbul’s Sabiha Gokcen International Airport and the firm which operates certain services within the airport for €225 million ($308 million or Rs 1,900 crore) to Malaysia Airport Holdings Berhad (MAHB), a statement said.

MAHB, which owns 20 per cent stake in the Turkey project, has decided to exercise its right of first refusal (ROFR) to acquire the stake held by the Indian infrastructure company, GMR said in a filing with the stock exchanges.

The development follows a deal where GMR Group had reportedly signed an agreement with Turkey's TAV Airports Holdings to sell its stake in Sabiha Gokcen for €220 million. This was subject to the exercise of ROFR by MAHB.

“GMR is evaluating the exercise of ROFR by MAHB and will intimate the stock exchange further developments in this regard,” GMR said on Tuesday.

The deal is for 40 per cent stake in both Sabiha Gokcen and LGM Havalimanı İşletmeleri Ticaret ve Turizm A.Ş. (LGM). LGM is responsible for the operation of the airport hotel, as well as the operation, marketing and allocation of catering (except for inflight caterings), food and beverage areas, kitchen, cafeteria, CIP lounges, ticket sales, parking and valet parking areas of the airport.

In a separate statement, MAHB said it is also looking to divest 10 per cent stake through a private placement.

Besides MAHB and GMR, Turkish conglomerate Limak Holding holds 40 per cent stake in Sabiha Gokcen. The consortium had won the mandate to build the airport in 2008 and operate it for 22 years for a licensing fee of €2.17 billion.

Istanbul connects Asia and Europe and has two big airports – Sabiha Gokcen on the Asian side and TAV Istanbul Ataturk Airport on the European side. Sabiha Gokcen was built for a capacity of 25 million passengers and recorded passenger traffic of 15.34 million in fiscal 2012-13.

The decision to sell its stake in the airport is part of GMR’s efforts to raise money to pare its debt and comes at a time when the firm has reportedly hired four banks to manage the listing of its airport business that is expected to raise $300-$350 million.

(Edited by Joby Puthuparampil Johnson)

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