Singapore's Changi may buy stake in GVK's airport business: Report
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Singapore's Changi Airports Group is in talks to buy a 26 per cent stake in the airport business of India's GVK Power & Infrastructure Ltd , the Economic Times has reported.
Changi, which operates Singapore's international airport, is likely to pay between 20 billion rupees and 22 billion rupees for the stake, the paper reported on Monday, citing people close to the deal.
At the top end of that range, GVK's overall airport business would be worth about Rs 80 billion.
GVK's shares were up 6.4 per cent at Rs 11.70 in early trading after rising as much as 18 per cent.
"The deal is in the final stages, and an announcement is likely to be made in January," the newspaper quoted a person familiar with the situation as saying.
Sources said last week that GVK has been looking to raise up to $500 million to retire debt and fund operations by selling a minority stake in its Australian unit. The company said in September it would pay $1.26 billion to buy a majority stake in three Australian coal projects.
GVK has total debt of about 50 billion rupees, the Economic Times said. A company spokesman declined to comment on the debt or on the reported negotiations.
GVK owns 50.5 per cent of Mumbai's airport and 43 per cent of Bangalore's airport, and it operates both.
It also holds the first right of refusal to develop a planned international airport at Navi Mumbai, for which bids are expected to be invited next year.
The sale of an equity stake in the business would help GVK secure a partner with deep pockets ahead of the Navi Mumbai airport bid.
Shares in GVK, valued at $330 million as of Friday's close, have slid 71 per cent so far in 2011, compared with a nearly 23 percent decline in the main stock index.
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