GMR Group Exits From Cebu International Airport JV In Philippines, Sell Stakes To Conglomerate Led By Advisor To President Marcos Jr

Indian infrastructure major GMR Group and Filipino infrastructure firm Megawide Construction Corporation on Friday (September 2) announced that they divested their entire stake in Mactan Cebu international airport (MCIA).

The airport is currently managed by GMR-Megawide Cebu Airport Corp. (GMCAC), a joint venture of Megawide Construction Corp and GMR Airports International BV (GAIBV). The JV holds a 25-year concession to develop, operate, and maintain MCIA.

One of the busiest airports in the Philippines, Mactan airport welcomed over two million passengers in the first half of the year, significantly higher than the 470,000 passengers in the same period in 2021.

Aboitiz InfraCapital, Inc. (AIC), an infrastructure arm of a conglomerate led by a key advisor to newly elected Philippines president Ferdinand "Bongbong" Romualdez Marcos Jr, will acquire the airport for $440 million through a two-part transaction.

As part of the first step, Megawide and GMR executed a share subscription and transfer agreement with Aboitiz InfraCapital Inc. (AIC) for AIC to acquire shares in GMCAC worth P9.5 billion (INR 13.3 billion). With the completion of this transaction, the Aboitiz family will now own a 33.3 per cent stake in GMCAC.

GMR will receive an upfront payment of Rs 1,330 crore and earnouts to be received over more than four years.

According to a regulatory filing by the group, the stake is being divested as part of the focus on deleveraging GMR Airports Ltd and churning assets for higher returns on investment.

"The transaction will be undertaken at an enterprise value of PhP 49.7 billion (INR 70.5 billion), and GAIBV will receive an upfront amount of PhP 9.4 billion (INR 13.3 billion) 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, (and) would also be entitled to additional deferred consideration based on the subsequent performance of GMCAC for the same period," the filing by the group said.