Bangalore, India’s IT city attracts a number of travellers each year, with the Kempegowda International Airport (KIA) being the first point of contact for millions each year. Formerly known as the Bangalore International Airport, KIA is all set to get a new investor in the form of Toronto-based Prem Watsa. According to reports, the billionaire owner of the Fairfax Group is keen to purchase shares held by GVK, with a security clearance towards this purchase sanctioned by the government. If the deal goes through, Fairfax will purchase a 33% stake from GVK at a cost of Rs.2,149 crore. Fairfax also purchased a 5% stake in the airport from Flughafen Zurich AG recently.
The primary reason for GVK to sell this stake is to reduce debt, with the company having a total debt of Rs.22.000 crore against its name.
GVK currently holds a 43% share in the airport, with the other stakeholders being Siemens Project Ventures (26%), Government of India (13%), Government of Karnataka (13%), and Fairfax (5%). Once completed, Fairfax will own 38% of the airport, with GVK owning 10%.
|Government of Karnataka||13|
|Government of India||13|
|Siemens Project Ventures||26|
*This is subject to the proposed deal between GVK and Fairfax going through.
The airport is likely to get new board members post the move, with Fairfax expected to nominate four representatives. While GVK will be a minor stakeholder it will continue to manage the airport, with both the CEO and MD belonging to the company.
The Kempegowda International Airport continues to be India’s third busiest airport, after Delhi and Mumbai. Over 20 million passengers were hosted by the airport last year, with this number expected to grow by around 20% each year. Valued at Rs.6,500 crore, it is bracing itself for further growth, with work on to expand the airport. It handled around 3.4 million international passengers last year, accounting for 8.5% of India’s total air traffic. In addition to passengers, the airport also moved close to 300,000 metric tonnes of cargo. With flights to and from a number of destinations catered here, Bangalore International Airport offers a host of amenities and features to travellers, ranking it among the best in the country.