Abu Dhabi Investment Authority (ADIA) and India's National Investment & Infrastructure Fund (NIIF) have signed an initial pact to acquire a 49% stake in the airports holding company of GVK Power & Infrastructure Ltd.
GVK Power said in a stock-exchange filing on Thursday that the company and units GVK Airport Developers Ltd and GVK Airport Holdings Ltd have signed a term sheet and exclusivity agreement with the sovereign wealth fund of Abu Dhabi and NIIF for the stake sale.
The transaction is subject to conclusion of confirmatory due diligence by ADIA and NIIF, agreement on definitive documents and satisfaction of customary closing conditions including regulatory and third-party approvals and lender consents.
GVK didn't disclose financial details of the deal but said all proceeds from the proposed transaction will be used to repay its debt.
The company said the move comes after it initiated a process to select investors to raise capital to reduce or refinance debt obligations of up to Rs 5,750 crore.
"The funds brought in through this proposed transaction will help us deleverage as we continue with our endeavours to create the infrastructure for a strong aviation hub in India that will provide the impetus for growth and development for the entire country," said GVK Reddy, founder and chairman of GVK.
"Our future focus will be on delivering Navi Mumbai International Airport, successfully monetising Mumbai airport’s real estate and building a strong airports business at GVK,” Reddy said.
Citigroup Global Markets India Pvt Ltd is acting as the exclusive financial adviser to GVK for the transaction.