GVK Power & Infrastructure Ltd. plans to raise up to Rs. 8,000 crore by divesting a stake in its airports business and other verticals. Also in the offing are an IPO and the merger of its airports arm, GVK Airport Developers Ltd. (GVKADL), with Bangalore International Airport Development Ltd. (BIADL).

BIADL was the holding company of Bangalore International Airport Ltd. (BIAL) and a step down subsidiary of GVK Power & Infrastructure.

The company’s management, headed by GVK Reddy, will seek shareholders’ nod for the moves.

The diversified infrastructure company had divested its stake in BIAL to Prem Watsa-headed Fairfax Group in 2017. The proceeds were to be used to repay the debt of GVKADL. Now the company has initiated a process with the Ministry of Corporate Affairs to merge GVKADL with BIADL through a scheme of amalgamation. The two companies have secured various approvals, and applications have been filed with the Registrar of Companies and the Official Liquidator, Hyderabad. To fund its expansion plans, GVK plans to raise up to Rs. 6,000 crore by diluting a stake in step-down subsidiary GVK Airport Holdings Ltd (GVKAHL).

GVKADL holds a 50.5 per cent stake in Mumbai International Airport Pvt Ltd (MIAL). With MIAL being awarded the greenfield Navi Mumbai airport project, GVK expects good valuations.

GVK is also looking at diluting stakes in various other subsidiaries in the airport, energy and transportation verticals.

The group plans to dilute its stake in GVKAHL through either an IPO, a private placement, sale to one or more investors or a combination of the options. It will move a special resolution at its AGM after the Audit Committee approves and recommends the move. The GVK management is also proposing a stake dilution in other subsidiaries to raise up to Rs. 2,000 crore.

Over the past few quarters, it has stepped up efforts to divest stakes in completed projects, the prime example being BIAL.

Now, to fund the proposed investment of about Rs. 16,000 crore in Navi Mumbai Airport, it is looking at fund-raising options.

Meanwhile, the GVK group, whose gas-based and coal-fired power plants are facing fuel shortage, expects the situation to improve later this year.

Its performance in the past 12 quarters has been impacted by the crisis at the power plants, forcing it to divest BIAL to pare the overall debt.

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