GMR to divest its stake in Megawide Cebu Airport Corporation

4 Sep 2022 , 01:33 AM

GMR Airports International BV GAIBV a stepdown subsidiary of GMR Infrastructure and direct subsidiary of GMR Airports has entered into definitive agreements with Aboitiz InfraCapital Inc AIC for AIC to acquire shares in GMR-Megawide Cebu Airport Corporation GMCAC GMCAC which is a joint venture between GAIBV and Megawide Construction Corporation MCC is the developer and operator of the award-winning Mactan Cebu International Airport MCIA GAIBV and MCC have agreed to sell down their existing stakes in GMCAC to accommodate the entry of AIC AIC is the infrastructure arm of the Aboitiz Group which is recognized as one of the best-managed companies in the Philippines and in Southeast Asia AIC aims to build purpose-driven infrastructure and serve as one of the building blocks of the countrys economy The company develops and operates economic estates water facilities digital infrastructure and transport mobility projects that enable businesses and uplift communities The transaction is subject to customary regulatory approvals in Philippines The agreement involves GMCACs issuance of primary shares and the transfer of secondary shares from Megawide and GAIBV to AIC amounting to PhP 95 bn which will result in the latter owning 33 and 13Percentage minus 1 share stake in GMCAC Simultaneously with the above the transaction likewise involves the issuance by Megawide and GAIBV of Exchangeable Notes for PhP 775 bn each aggregating to amount of PhP 155 bn Notes The Notes will mature on 30th October 2024 and will be exchanged by AIC for the remaining 66 and 23Percentage plus 1 share of GMCACs outstanding capital stock The transaction will be undertaken at an enterprise value of PhP 497 bn INR 705 bn and GAIBV will receive an upfront amount of PhP 94 bn INR 133 bn in lieu of the shares being transferred and Notes being issued We would continue to operate as the Technical Services Provider to GMCAC until December 2026 would also be entitled to additional deferred consideration based on the subsequent performance of GMCAC for the same period A portion of the primary investment into GMCAC shall be used for acquisition by it of identified entities providing services at Cebu Airport