Airport operator GVK Power & Infrastructure Ltd has sold a 33 percent stake in India’s Bengaluru airport to Canada’s Fairfax Financial Holdings to reduce debt, the company said in a statement on Monday.
Fairfax will pay 21.49 billion rupees (US$322.75 million) for the stake, GVK said in a statement to the stock exchange.
The deal, likely to be completed by mid-2016, will help GVK reduce debt by 20 billion rupees and save up to 3 billion rupees a year in interest costs, the company said.
“This is an important and successful milestone in deleveraging our balance sheet, and all proceeds from this stake sale shall be used to bring down our debt obligations to our lender,” GVK Reddy, company chairman and managing director, said.
Shares in GVK, which also operates Mumbai airport, ended 6 percent higher. The Mumbai market fell 1.46 percent.
Fairfax, headed by well-known contrarian investor Prem Watsa, made billions by correctly calling the 2008 financial crisis. In 2014, the Toronto-based company set up Fairfax India to boost the firm’s private equity, public equity and debt investments in the country.
Fairfax India went public in 2015 and raised more than US$1 billion via its initial public offering.
(Reporting by Aditi Shah; Editing by Sunil Nair)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Vivek Prakash