Stake sale in airport business to help reduce debt, says GMR Group

GMR Infrastructure has sold its stake in airports business to Tata Group, GIC and SSG Capital Management. To understand the rationale behind the deal, CNBC-TV18 spoke with Saurabh Chawla, ED-Finance at GMR Group and Sushil Modi, Group CFO.

Modi said the deal would help bring down their consolidated debt. ”The debt as of December 2018 was around 20000 crore, and effectively the debt would go down by Rs 8000 crore because the primary proceeds that come into GMR Airport Limited will be utilised to repay some of the debt sitting at GMR Airport Ltd. So net-net Rs 7000 crore of secondary proceeds, as well as Rs 1000 crore of primary proceeds reduces the leverage or the debt sitting on GMR’s consolidated number of Rs 20,000 crore.”

"Moreover, this reduction in debt will wipe out the corporate debt at GMR Airport Ltd, said Modi, adding that the consolidated finance charges for the company will also halve due to this debt reduction. The finance charges before debt reduction stood at around Rs 2000 crore", said Modi.