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Varde may invest in GMR Airports’ bond issue, Infra News, ET Infra

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MUMBAI: Private equity fund Varde Partners is likely to be among investors in GMR Airports’ planned ₹800-crore bond sale next week, said people familiar with the matter. The fundraising is to refinance GMR Airports’ high-cost debt and also invest in upgrading its airports, said people familiar with the matter.

The coupon rate, similar to the previous round, will consist of a 5% cash coupon and an 8.275% redemption premium, taking the total yield to about 13.3%.

The operator of airports in Delhi, Hyderabad and Goa, which has approval from its board to raise ₹5,000 crore by March 2024, recently raised ₹1,950 crore. Standard Chartered Bank, JPMorgan, Deutsche Bank, Varde Partners and Trust Investment provided the three-year debt facility as reported by ET.

In that round, Varde entity Credit Solutions India Trust had committed ₹500 crore as the anchor investor.

GMR and Varde spokespeople did not respond to request for comment.

“Given GMR’s financial situation, borrowing in the international market might require a similar or slightly higher interest rate, and the collateral that works domestically may not be applicable offshore,” said a private credit fund investor.

Dollar bonds are issued either by GMR’s Delhi International Airport or structured differently, he added. The existing bonds of GMR Airports are trading in the 8.00-8.50% range. Care Ratings, which assigned a Care A- rating for the company’s ₹5,000 crore bonds, said the proposed funding would address the redemption of its ₹1,406 crore bond due in December. The GMR Group has implemented a composite scheme of merger of GMR Airports with GMR Infra Developers and GMR Airports Infrastructure. Following the merger, French airport operator Groupe ADP has become the second largest shareholder of GMR Airports.

As part of the merger agreement, GMR Airports Infrastructure had raised ₹2,900 crore from Groupe ADP through 10-year foreign currency convertible bonds in March 2023. The proceeds were used to repay debt in a subsidiary and settle contingent liabilities related to non-airport business. The merger is expected to enhance financial flexibility, with the listed GMR Airports becoming a direct holding company of various airport assets.

  • Published On Dec 18, 2023 at 04:15 PM IST

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