GMR Infra Refinanced the Funding for Goa Airport

GMR Infrastructure has sewn up the funding needed for the construction of a new airport at Mopa in Goa and will announce it soon, according to Madhu Terdal, the Chief Financial Officer of the airport-to-power conglomerate. A special purpose vehicle of the company, GMR Goa International Airport, is expected to set up the public private partnership project by May 2020.

"The financial documents have been sent to the Airports Authority of India for the approval. So, once the approval comes and some other approvals are awaited, we will be achieving financial closure. But, otherwise, GMR is ready to announce financial closure," he said.

The total capital expenditure for the Mopa airport is Rs 1,900 crore in Goa, to be funded on a 70:30 debt:equity ratio.

“It has already been fully under-written; entire debt of Rs 1400 crore-Rs 1,500 crore has been under-written by the banks,” Terdal said.

The infrastructure group won the bid in August 2016 to develop Goa’s second airport . The airport operator will enjoy the rights for 40 years, extendable by 20. The company will get 232 acres of land to build the north Goa airport and exploit the real estate for commercial development.

GMR is the largest airport operator in the country with Delhi and Hyderabad airports already functioning and Cebu airport in Philippines already a work-in-progress. It has 64 percent, 63 percent and 40 percent stakes in the three airport companies, respectively. It sold off its 40 percent stake in an Istanbul airport in 2013 and last year received Rs 1,800 crore as arbitration award against the arbitrary cancellation of its licence to operate an airport in Maldives.

Terdal had more positive news to share about the company’s airports business. He said the company would complete the expansion at Cebu airport by the middle of next year. Also, on the anvil, are a Rs 4,500 crore-Rs 5,000-crore expansion in Delhi and a Rs 2,500-crore project at Hyderabad airport.

The company is waiting for the Civil Aviation Ministry’s decision on shifting flights of two of three low-cost airlines to terminal T2 to start work on expanding terminal T1 of the Delhi airport . The airlines -- SpiceJet, GoAir and Interglobe Aviation (operator of IndiGo) – are reluctant to shift to T2 due to higher cost of operations from that terminal. Since 2010, T2 has only been used for Haj flights.

While GMR awaits that decision from the Civil Aviation Ministry, it hopes to take the success of financial restructuring achieved at the Delhi airport SPV to its Hyderabad airport company.

"We have refinanced the entire debt in Delhi airport by bonds. One set of bonds which earlier we went for USD 289 million has been refinanced by 7-year bonds. And, remaining USD 522.6 million finance is now converted into a 10-year bond. So, now we will be focusing on Hyderabad airport. So Hyderabad airport is also now working out all the options whereby we can refinance it or reduce the interest rate as well as possibly move into the bond structure,” the GMR CFO said.

As of March 31, 2016, GMR Hyderabad International Airport had a long-term debt of Rs 2,053.62 crore and long-term liabilities of Rs 242.13 crore.