Home » CITY NEWS » GVK Sells 33% Stake in Bangalore Airport to Canada’s ‘Warren Buffet’

GVK Sells 33% Stake in Bangalore Airport to Canada’s ‘Warren Buffet’

Power & Infrastructure Limited said it will sell off its 33% stake in Bangalore International Airport Limited (BIAL) to Fairfax India Holdings Corporation and Fairfax Financial Holdings Limited (TSX: FFH), owned by Prem Watsa, who is also known as Canada’s "Warren Buffet".

The deal will be done via their subsidiaries in Mauritius, said both companies. The deal amounting to about Rs.2,149 crore ($321 million) will now be owned by Canada-based Prem Watsa, who owns Fairfox.

The deal would bring down the debt burden of about Rs.2,000 crore on Kempegowda International Airport saving in addition Rs.300 crore per annum, said the company.

Pending the customary approval of closing conditions and third party consents, including lender consents, the deal is expected to be completed by July 2016. After the deal, GVK’s holding will come down to 10% from 43% it currently holds.

GVK Airport Developers, a subsidiary of GVK Power & Infrastructure, had received multiple offers, from which the Fairfax Group was chosen, said its Chairman and Managing director GVK Reddy. "This is an important and successful milestone in deleveraging our balance sheet, and all proceeds from this stake sale shall be used to bring down our debt obligations to our lenders. We chose Fairfax as a partner in BIAL as we have a long standing relationship with its chairman, Prem Watsa and we would look forward to partnering with them in developing Kempegowda International Airport through its next stage of expansion as we develop a new world-class Terminal 2 and a new runway."

Prem Watsa, Chairman of Fairfax India, and Chairman and CEO of Fairfax, said there will be no change in management structure. "We will work closely with all stakeholders to manage our stake in BIAL going forward, and will support G V Sanjay Reddy to continue to lead the management team as Managing Director (MD) of BIAL and Dr GVK Reddy will continue as Co Chairman of BIAL" he said.

The Kempegowda International Airport, Bengaluru (KIAB) was built under a 30+30 year concession agreement from the Government of India and it the country’s first greenfield airport in India that was built to the highest international standards by the private sector under a public-private partnership. The airport began operations in May 2008 and has been adjudged as the ‘Best Regional Airport in Central Asia’ by Skytrax in 2015.

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BANGALORE AIRPORT,GVK POWER,BANGALORE AIRPORT,COMPANIES NEWS,]

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