GMR Infrastructure Limited announces Strategic Group Restructuring to unlock value & simplify corporate holding structure

The Board of GMR Infrastructure Limited ("GIL") together with other Group companies - GMR Power Infra Limited ("GPIL") and GMR Power and Urban Infra Limited ("GPUIL") - today announced a composite Scheme of Arrangement ("Scheme") involving vertical split demerger of the NonAirport Business (Energy, EPC, Urban Infrastructure, etc.) of GIL into GPUIL, as a going concern, along-side amalgamation of GPIL with GIL, as a step preceding demerger.

The restructuring is a step in the right direction towards creating pure plays in different businesses of the Group thereby attracting sector-specific global investors and unlocking value for the current shareholders of GIL. This will also pave the way for focused growth and sustained value creation for all stakeholders over a period of time.

Separate listing of both the Airport and Non-Airport Businesses will also help in simplifying the corporate holding structure. The vertical split demerger will go a long way in facilitating deeper understanding of the Airport Business independently as compared to other business verticals within the Group.

Key Highlights of Scheme of Arrangement

- Demerger of the Non-Airport Business of GIL into GPUIL as a going concern.

- Scheme to create Mirror shareholding of GIL in GPUIL with all existing shareholders of GIL becoming shareholder of GPUIL in the same proportion. Scheme envisages issue of 1 additional share of Rs.5/- each of GPUIL for every 10 shares in GIL of Re.1/- each as on the record date.

- Post the Scheme, GIL to emerge as India's Only Pure-Play Listed Airports Company. All existing shareholders of GIL to continue their same shareholding in GIL.

- Scheme also envisages amalgamation of GPIL with GIL as a step preceding demerger.

- The appointed date for the Scheme, being the date on which the undertakings shall vest in the respective resulting companies, has been fixed at April 1, 2021.

Strategic Rationale for Separating Airport Business

- Over the last few decades, GMR has significantly grown and diversified into multiples segments within the broader infrastructure space viz. Airports, Energy, Urban Infrastructure, SEZ, EPC, etc.

- At an initial stage of growth journey, a combined housing of various segments was required to incubate, seed, ramp-up and grow them, both from management and funding perspective to reach a stage where they can stand and sustain on their own.

- Each of these multiple business segments have distinct business models, operating nuances, capital commitments, risk & return profile, etc. These businesses have grown disproportionately over a period of time and are now at varied stages of their evolution from an overall Industry perspective. As these businesses mature and chase next phase of their growth, it would be strategically apt to segregate them.

- The Airport Business has grown multi-fold both domestic and overseas and is expected to benefit with enhanced focus and specialization, building further on its capabilities and strong brand presence.

The Scheme is expected to be in the best interests of the Companies and their respective shareholders, employees and creditors.

Grandhi Kiran Kumar, Managing Director & CEO of GMR Infrastructure Limited said: "Over the years, GIL has grown multi-fold and with various divergent businesses housed under one holding structure. Shareholders have been suggesting us to offer Pure Plays listed vehicles to ride the growth trajectory of matured & scaled-up Infrastructure Businesses. We have been closely evaluating various options and as a step in that direction, post the separation of Non-Airport Business, GIL will be 'India's only Pure Play listed Airports Company' and continue its growth journey.

We are equally excited that our Non-Airport Businesses in GPUIL, with our deep understanding & pre-qualifications backed by superior execution track record is well positioned to create value for all stakeholders. We at GMR Group are committed and will continue to evaluate various strategic options to unlock shareholder value."

The Scheme is subject to the customary approvals from the Stock Exchanges, SEBI, NCLT, Shareholders and Creditors, etc.

Shares of GMR INFRASTRUCTURE LTD. was last trading in BSE at Rs.25.7 as compared to the previous close of Rs. 25.85. The total number of shares traded during the day was 2690518 in over 2436 trades.

The stock hit an intraday high of Rs. 26.7 and intraday low of 25.35. The net turnover during the day was Rs. 69934419.

Source : Equity Bulls

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