GVK to acquire L&T stake in Bial

GVK Airport Developers Pvt Ltd, a wholly owned subsidiary of GVK Power and Infrastructure Ltd, is in the process of acquiring the 17% stake of Larsen & Toubro (L&T) in Bengaluru International Airport Ltd (Bial).

GVK Airport Developers had earlier this month acquired Zurich Airport's 12% stake in Bial.

The GVK group, which is looking for a larger role in India's airport business, holds nearly 37% stake in Mumbai International Airport Limited (Mial) the consortium that runs the Chhatrapati Shivaji International Airport. There were unconfirmed media reports earlier this month that the group was in talks for acquiring 13.5% more stake in Mial, from its South African consortium partner, Bidvest group.

It could not be ascertained whether L&T would sell its entire stake at one go. A spokesperson of the company declined to comment. The deal size could be in the region of Rs 500 crore, considering that GVK had bought the Zurich Airport stake for Rs 484.60 crore.

The Bangalore airport, the third busiest in the country, has been valued at more than $1 billion (Rs 4,680 crore) within 18 months of its opening.

It handled 8.7 million passengers in the first year. Ind-ustry insiders say GVK can raise the acquisition funds through internal accruals.

The existing large stakeholders in Bial have the right of first refusal for picking up the stake, but that expires Friday night. Siemens holds 40% stake in Bial, L&T 17%, GVK 12% and Zurich 5% in Bial, while the remaining 26% is with the government. Of this, 13% is with the Karnataka government and 13% with the Airports Authority.

Sanjay Reddy, vice-chairman, GVK Industries, was quoted in a report that his company would be keen on acquiring stakes from L&T if other promoters have no objection. Shares of GVK Power & Infrastructure, the stakeholder in Mial, were up marginally to close at Rs 51.85 on the BSE (^BSESN : 16028.13 -14.05) on Friday, while L&T shares were up 1.16% at Rs 1,633.