Bangalore-based infrastructure major GMR plans to pick up minority stakes in new airport projects in Myanmar (Burma), South East Asia and Latin America as it pursues an asset-light strategy to maintain healthy cash flows from global operations without adding on to its existing debt pile.
The group, which has faced a series of setbacks in airport projects in India and overseas, may also look to offload a stake in its airport business that contributes half its revenue — of R8,500 crore. It is in preliminary talks with investors.
GMR has submitted an expression of interest for a 10% stake for an airport at Rangoon, Myanmar’s capital, with a local business firm KBZ as consortium partners, a top executive said.
“We are cautious, and look at opportunities very closely,” said Sidharath Kapur, chief financial officer (airports), GMR.
“We would look at projects on a case-to-case basis. It’s a question of price. We have to strike a balance.”
He did not say how much the Myanmar project would cost, saying discussions are in very early stages.
Myanmar would be GMR’s third overseas airports project. It has executed a project in the Turkish capital of Istanbul in consortium with Limak Holding, Turkey and Malaysia Airports Holdings Berhad (MAHB).
Also, in 2010, GMR, along with its sole consortium partner MAHB, won the concession for the $511 million Male' International Airport, defeating bids from the Anil Ambani group-led Mexico Airports Aeropuertos consortium and the GVK-Lughafen Zurich AG combine.
But work on the project was halted by a new government that captured power in Maldives in a coup this February and opposed all earlier privatisation bids.
The Mohamed Waheed government has threatened to cancel GMR’s contract. “The Male project had projected just 3-4% growth, but what we found attractive was the price,” Kapur said.
“So, it’s different things we look for in different projects.”
In India, GMR operates the Delhi International Airport Ltd (DIAL) and the Hyderabad International Airport.
Infrastructure companies borrowed heavily as they vied for projects in highways, power and airports, but the economic slowdown, and lack of clarity in policies and fuel supply stalled many power projects and delayed roads. High interest rates made borrowings extremely costly, while delay in getting projects off the ground choked cash flow.
GMR had amassed a R32,900-crore debt, prompting it to freeze investments this fiscal, optimise costs, and maximise cash.
“We will use our expertise to pick up