Bangalore based GMR Group is all set to raise $150 million from three PE firms. A consortium of three PE firms that include, Standard Charted Bank's private equity arm, Jacob Ballas & Old Lane will be investing in the company according to two sources familiar with the deal.
This is the second round of private equity fund raising by GMR for its airport arm, GMR Airports Holding. Last month, it had raised $200 million from SBI Macquarie Infrastructure Fund .
The company is awaiting government approval for the deal. According to the current regulations, any investment of or above Rs 1,200 crore in the aviation sector needs government approval. Since SBI Macquarie's investment was through an offshore vehicle, the new deal will breach the upper limit. However sources said that the company is optimistic that it will get the necessary approval.
The investments would be in the form of a compulsorily convertible structured product that will be convertible when the unit goes public. The private equity investment by SBI Macquarie was also through compulsory convertible preference shares.
'The approval process is underway. I am bond by the confidentiality agreement, so I won't comment on the names. As if now we are waiting for the FIBP approval.' said A Subba, chief financial officer of GMR Infra.
Standard Charted Bank declined to comment on the story.
GMR Airport Holdings operates two airports in India (New Delhi and Hyderabad) and one in Turkey (the Sabiha Gokcen International Airport, Istanbul). The airport arm accounts for as much as 46 per cent of GMR Infra's revenues. The private equity investment will be used to develop new projects.
GMR Infra has been battling a high debt of around Rs 15,300 crore, while its airport business itself has a debt of around Rs 9,200 crore. The fresh equity infusion could come handy in bringing down the company's debt-equity ratio.
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