Dec. 7 (Bloomberg) -- GMR Infrastructure Ltd. may lose control of Male international airport in the Maldives after a Singapore court allowed the island-nation to take over the facility following cancellation of the contract.
The court yesterday set aside a Dec. 3 order preventing Maldives from interfering with the performance of Bangalore-based GMR, according to a decision handed out by three judges led by Chief Justice Sundaresh Menon. Maldives plans to run the island’s biggest airport from tomorrow, according to Masood Imad, a spokesman for President Mohamed Waheed.
Maldives may have to compensate GMR in accordance with the agreement between them, according to the court’s decision. State-owned Maldives Airport Co. is liable to pay GMR and its lenders more than $700 million in compensation, Sidharath Kapur, chief financial officer of airports at the Indian company, said.
GMR spokesman Arun Bhagat declined to comment on the company’s plans. “We will wait till the end of the day to see what happens,” he said in a phone interview from Male. Imad didn’t respond to two calls to his work phone today. Mohamed Ibrahim, managing director of Maldives Airport, also didn’t answer two calls to his mobile phone.
The Male facility accounts for 20 percent of GMR’s airport business revenue, Kapur said Dec. 5. Airports contributed almost half of the builder’s sales in the year ended March 31, from a fifth in 2008, according to data compiled by Bloomberg.
GMR dropped as much as 4 percent, the most in more than three weeks, to 19 rupees, and changed hands at 19.30 rupees at 11:44 a.m. in Mumbai. The stock has fallen 8 percent this year, compared with a 32 percent gain in the S&P CNX 500 Index.
The project was awarded to GMR, which also runs India’s biggest airport in New Delhi, and Malaysia Airports Holdings Bhd. in 2010 by then-President Mohamed Nasheed, who was ousted in February. The contract never received the necessary approval from parliament and was signed under “dubious circumstances,” according to Imad. Waheed took power after Nasheed resigned.
Malaysia Airports owns 23 percent of GMR Male International Airport Pvt. and the rest is held by GMR.
GMR moved the Singapore court, the designated arbitrator, after Maldives canceled the contract on Nov. 27.
To contact the editor responsible for this story: Neil Denslow at email@example.com