GMR Airport Infrastructure Ltd, the group holding firm that was formerly known as GIL (GMR Infrastructure Limited) recently unveiled the merger of GMR Airport limited with GIL. The merger, which is seeking regulatory approvals, should be finished during the upcoming fiscal year. The GMR group will keep holding the majority interest in the GIL after the merger. As a result, the GMR’s collaboration with French airport manager Groupe ADP (Aeroports de Paris SA) would advance. The merging company’s 2nd largest shareholder is Groupe ADP. GMR Group owns 33.7% of the company, while Groupe ADP will control 32.3% of the company’s shares that have been fully paid up by the public.
The GMR group will keep holding the majority interest in the GIL after the merger
In order to further improve the balance sheet and take advantage of potential growth prospects, the merger will be a key move. Through a Strategic Partnership, GMR Airport Infrastructure 2020 and Groupe ADP agreed that the latter would buy a 49% interest in GAL. Groupe ADP had tied equity earnouts of about 8% of GAL and cash earnouts of Rs 1060 cr to GIL at the time of the transaction. A merger is a transformational event that will raise the value for all firms involved. The firm will be able to seize possibilities in the quickly expanding airport business and hold onto its position as the industry leader because of its solid collaboration with Group ADP.
According to the company’s announcement, Groupe ADP and GIL will settle the cash earnouts to GIL at Rs 550 crore and the equity earnouts, increasing GIL’s holding in GAL from 51% before the merger to 55%. Additionally, GMR Infrastructure stated that it will obtain Rs 2900 crore from Groupe ADP via ten-year FCCBs. (Foreign Currency Convertible Bonds). This merger is a move in the correct direction that was made at the right time, as it was anticipated earlier in 2020 to simplify the company structure and strengthen the balance sheet. Among other things, the combination will bring about operational excellence and financial stability, giving GIL an advantage over the competition.
A merger is a transformational event that will raise the value for all firms involved
The business will keep its focus on opportunities for selective expansion while keeping its commitment to a cautious balance sheet. Additionally, the merger will enable a faster and complete settlement of the earnouts, which were negatively impacted by the epidemic for two years. Groupe ADP’s purchase of foreign currency convertible bonds will allow GIL to significantly reduce its debt burden by paying off corporate obligations and the majority of the contingent liabilities associated with GPUIL. (GMR Power and Urban Infra Ltd).