MUMBAI: Canada’s
Public Sector Pension Investment Board
, or
PSP Investments
, and Spanish
airport
operator
Ferrovial
, which runs
Heathrow
of London, among others, are the two final suitors advancing on a large share purchase in
GVK Airport Holdings
, people directly familiar with the matter said.
GVK owns and operates the country’s second busiest Mumbai International Airport, and will manage the proposed Navi Mumbai International Airport too. Citigroup is said to be advising the transaction, which could conclude with one of the two bidders in the next two months. Financial details of the potential transaction could not be ascertained at this stage.
Earlier this month, GVK Power & Infrastructure sought shareholder nod to sell over 50% stake in the privately held
airports
holding company for raising up to Rs 8,000 crore. The capital raised will be deployed to pare debt and for developing the
Navi Mumbai airport
. GVK Airport Holdings has over Rs 8,000-crore debt, while the group’s overall debt hang is well over Rs 20,000 crore.
One of the sources cited earlier said the share sale to one of the bidders would be up to 49%. However, GVK Airport is likely to go ahead with an IPO plan sometime next year, which would see the promoter stake fall below 50%. The company is a fully owned subsidiary of GVK Power & Infrastructure.
PSP and Ferrovial were in the final lap after the latest phase of protracted deal-making in GVK Airport had attracted several bidders, including Australian infrastructure investor AMP Capital, Abu Dhabi Investment Authority and Malaysia Airports, among others.
When contacted, a GVK spokesperson declined to comment on speculation. PSP Investments, too, declined to comment, while Ferrovial could not be reached immediately.
Canadian pension asset manager PSP Investments controls German airport operator AviAlliance, which owns stakes in Düsseldorf, Hamburg, Athens and Budapest airports. In fact, AviAlliance has had multiple conversations with GVK going back to more than three years when TOI first reported it in 2015.
Several global pension managers have been showing interest in snapping up Indian infrastructure assets for stable annuity returns. PSP is stepping up interest in India, tracking other Canadian pension funds like CPPIB and CDPQ.
Ferrovial operates four airports in the United Kingdom — Heathrow, Glasgow, Aberdeen and Southampton. The Spanish infrastructure conglomerate is also into toll roads, construction and urban and environmental services. GVK Airport Holdings owns 50.5% stake in Mumbai International Airport, which in turn, through a step-down subsidiary, has won the rights to develop the Rs 15,000-crore Navi Mumbai project. India’s domestic airport passenger traffic is scheduled to touch 150 million next year, reporting 15-20% year-on-year growth in recent past.