Groupe ADP acquires 49% stake in GMR Airports with revised conditions

July 8, 2020: Groupe ADP has completed the previously announced partnership with GMR Infrastructure with the acquisition of 49 percent stake in GMR Airports.

The deal has however undergone modifications due to the pandemic caused circumstances.

Groupe ADP and GMR have signed an amendment to the share purchase agreement and the shareholders' agreement. As per the amendment, the price paid at the second closing is reduced by Rs 1,060 crore compared to the initial purchase price of Rs 5,532 crore. These earn-outs are linked to the achievement of certain agreed operating performance metrics as well as the receipt of certain regulatory clarifications over the next 5 years.

Also, the second tranche of the investment for 24.01 percent has been structured in two parts:

• A firm amount immediately paid at second closing, for a total of Rs 4,565 crore, including Rs 1,000 crore equity infusion in GMR Airports.
• Earn-outs amounting to Rs 1,060 crore, subject to the achievement of certain performance-related targets by GMR Airports upto FY2024.

February 2020
Groupe ADP had signed on February 20, 2020 a share purchase agreement to buy, under certain usual regulatory conditions, 49 percent stake in GMR Airports.

The operation should have been performed in two phases: a first phase for the acquisition of a 24.99 percent stake, and a second phase, subject to certain regulatory conditions, for the acquisition of 24.01 percent.

Since February 26, 2020, Groupe ADP has held 24.99 percent of GMR Airports, and had, therefore, joined the board of directors of GMR Airports with highly extended governance rights since that date.

GMR will use the money to service debts
The amount of Rs 4,565 crore towards second & final tranche payment from Groupe ADP has been received. This money will primarily be used in servicing the debt which will help deleverage GMR Group further and result in improved cash flows and profitability.

As part of the terms of transaction, GMR will retain management control over the Airports Business with Groupe ADP having the customary rights and board representation at GMR Airports and its key subsidiaries.

The partnership between GMR and Groupe ADP is being structured as a strong strategic partnership to be built on two-way exchange of expertise, personnel, knowledge and market access.