Billionaire Rao's GMR, Axis Discuss $360 Million Loan for Maldives Airport
GMR’s Maldives venture may sign the 12-year loan by the end of this month, Sidharath Kapur, chief financial officer for airports, said in a telephone interview yesterday from New Delhi. The debt may be syndicated to overseas lenders and multilateral agencies, he said, without providing a timeframe.
The Bangalore-based airport operator and partner Malaysia Airports Holdings Bhd. in June won a bid to modernize and expand Male International Airport as they seek to benefit from rising tourism in the Maldives, a nation comprising 1,190 coral islands in the Indian Ocean. Indian companies such as GMR have expanded overseas as bureaucracy and land disputes slow infrastructure projects at home.
“For a company like GMR to grow, this is the way it has to be,” said Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., which manages $100 million in assets, in New Delhi. “Indian infrastructure projects can face bottlenecks and execution problems.”
A spokesman for Axis Bank, India’s fourth biggest by market value, said he wasn’t able to immediately comment.
GMR Maldives International Airport Ltd. will spend about $510 million on the Male terminal, which will have a capacity to handle 5 million users a year, Kapur said. The airport currently handles about 2.5 million passengers a year, he said.
“The government of the Maldives is taking steps to attract tourism from India and Southeast Asia,” he said. “That will drive growth.”
GMR Maldives, 77 percent owned by the Indian company and 23 percent by Malaysia Airports, will build and operate the terminal for 25 years. The facility will be ready by 2014.
The Maldives attracted 683,000 tourists in 2008, growing at an average 12 percent annual pace since 1980, compared with the world average growth of 5 percent, the government said on its website.
GMR got about 33 percent of revenue from airport operations in the year ended in March, according to data compiled by Bloomberg. The company also builds highways and operates power projects.
In July, GMR’s new terminal in New Delhi started international flights. The facility, run by a group also backed by state-run Airports Authority of India Ltd., Frankfurt-based Fraport AG and Malaysia Airports, cost about $2.7 billion to develop, along with other renovations.
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