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Singapore's Changi eyes GVK's airport biz stake
http://sg.finance.yahoo.com/news/Singapore-Changi-eyes-GVK-rsg-2656188585.html?x=0
MUMBAI (Reuters) - Changi Airports Group is in talks to buy a 26 percent stake in the airport business of GVK Power & Infrastructure Ltd , the Economic Times reported, potentially giving it the chance to tap into India's fast-growing air travel industry.
Government-owned Changi, which operates Singapore's international airport, is likely to pay between 20 billion rupees and 22 billion rupees for the stake, the newspaper reported on Monday, citing people close to the deal.
At the top end of that range, GVK's airport business would be worth about 80 billion rupees.
"The deal is in the final stages, and an announcement is likely to be made in January," the paper quoted a person familiar with the situation as saying.
GVK owns 50.5 percent of Mumbai's airport, which it is redeveloping at a cost of about $2.3 billion, as well as a 43 percent stake in Bangalore's airport. The company operates both airports.
The company also holds the first right of refusal to develop a planned international airport on the outskirts of Mumbai, for which bids are expected to be invited next year.
The sale of an equity stake in the business would help GVK secure a partner with deep pockets ahead of the Navi Mumbai airport bid.
"As on date, neither the company nor its subsidiary have entered into any agreement with any party for selling equity stake in our airport vertical," GVK said in a statement to the stock exchanges.
However, the company explores various possible options with strategic business partners to sell stake in its various businesses, it added.
A Changi spokesman declined to comment, while reiterating that the government-owned company "considered market opportunities all the time".
Domestic airline traffic in India rose 17.6 percent to 55 million passengers in the first 11 months of 2011, data showed, but the growth has not translated into profits for carriers.
Indian airlines are expected to collectively post a loss of $2.5 billion in fiscal year ending in March, hit by high jet fuel costs and an inability to raise fares in a cut-throat market.
Sources said last week that GVK has been looking to raise up to $500 million to retire debt and fund operations by selling a minority stake in its Australian unit.
The infrastructure-focused company, which also operates in the roads and power sector, said in September it would pay $1.26 billion to buy a majority stake in three Australian coal projects.
GVK has total debt of about 50 billion rupees, the Economic Times said.
GVK's shares were up 6.4 percent at 11.75 rupees in the afternoon after rising as much as 18 percent in early trade.
Shares in GVK, valued at $330 million as of Friday's close, have slid 71 percent so far in 2011, compared with a nearly 23 percent decline in the main stock index (.BSESN).
(Reporting by Prashant Mehra, Additional reporting by Saeed Azhar in SINGAPORE; Editing by Ted Kerr and Ranjit Gangadharan)
http://sg.finance.yahoo.com/news/Singapore-Changi-eyes-GVK-rsg-2656188585.html?x=0
MUMBAI (Reuters) - Changi Airports Group is in talks to buy a 26 percent stake in the airport business of GVK Power & Infrastructure Ltd , the Economic Times reported, potentially giving it the chance to tap into India's fast-growing air travel industry.
Government-owned Changi, which operates Singapore's international airport, is likely to pay between 20 billion rupees and 22 billion rupees for the stake, the newspaper reported on Monday, citing people close to the deal.
At the top end of that range, GVK's airport business would be worth about 80 billion rupees.
"The deal is in the final stages, and an announcement is likely to be made in January," the paper quoted a person familiar with the situation as saying.
GVK owns 50.5 percent of Mumbai's airport, which it is redeveloping at a cost of about $2.3 billion, as well as a 43 percent stake in Bangalore's airport. The company operates both airports.
The company also holds the first right of refusal to develop a planned international airport on the outskirts of Mumbai, for which bids are expected to be invited next year.
The sale of an equity stake in the business would help GVK secure a partner with deep pockets ahead of the Navi Mumbai airport bid.
"As on date, neither the company nor its subsidiary have entered into any agreement with any party for selling equity stake in our airport vertical," GVK said in a statement to the stock exchanges.
However, the company explores various possible options with strategic business partners to sell stake in its various businesses, it added.
A Changi spokesman declined to comment, while reiterating that the government-owned company "considered market opportunities all the time".
Domestic airline traffic in India rose 17.6 percent to 55 million passengers in the first 11 months of 2011, data showed, but the growth has not translated into profits for carriers.
Indian airlines are expected to collectively post a loss of $2.5 billion in fiscal year ending in March, hit by high jet fuel costs and an inability to raise fares in a cut-throat market.
Sources said last week that GVK has been looking to raise up to $500 million to retire debt and fund operations by selling a minority stake in its Australian unit.
The infrastructure-focused company, which also operates in the roads and power sector, said in September it would pay $1.26 billion to buy a majority stake in three Australian coal projects.
GVK has total debt of about 50 billion rupees, the Economic Times said.
GVK's shares were up 6.4 percent at 11.75 rupees in the afternoon after rising as much as 18 percent in early trade.
Shares in GVK, valued at $330 million as of Friday's close, have slid 71 percent so far in 2011, compared with a nearly 23 percent decline in the main stock index (.BSESN).
(Reporting by Prashant Mehra, Additional reporting by Saeed Azhar in SINGAPORE; Editing by Ted Kerr and Ranjit Gangadharan)
