Mumbai:GVK Power and Infrastructure Ltd has acquired a majority stake in Mumbai International Airport Pvt. Ltd (Mial) by buying 13.5% equity stake from Bid Services Division (Mauritius) Ltd for $231 million (Rs 1,134 crore).

Once the transaction is complete, the infrastructure firm will hold 50.5% of Mial, up from 37%. Bid Services will still hold another 13.5% stake in the airport operator, ACSA Global of South Africa 10%, and state-run Airports Authority of India the remaining 26%.

Equity transfer: A file photo of the Mumbai international airport. GVK Power expects the Mumbai and Bangalore airports together to account for passenger traffic of around 43 million for fiscal 2012. Hindustan Times.

GVK Airport Holdings Pvt. Ltd, a unit of GVK Power, on Tuesday said it has bought 108 million equity shares from Bid Services for $231 million.

In March, GVK Power had entered a share purchase agreement with Bid Services, without disclosing details of valuation.

Despite regulatory challenges, Indian aviation is a most happening space and local groups are convinced to buy out global partners’ shares, according to Amber Dubey, director of aerospace and defence advisory at consultancy KPMG.

“GVK always wanted to have a greater management, say, in the airports that they are running, and this move is very much in line of that strategy," Dubey said.

GVK Power, which also operates the Bangalore airport, is in the process of buying its partners’ shares to secure majority control. It expects the two airports together to account for passenger traffic of around 43 million for the fiscal year 2011-2012.

GVK Power dropped 2.68% to close at 14.50 on Tuesday on the Bombay Stock Exchange, when the benchmark Sensex index lost 1.63% to close at 16,748.29 points. The announcement was made after the market closed.

The latest transaction will help in consolidating GVK Power’s stake, director and chief financial officer Issac George said on Tuesday.

In August, GVK Power said it will raise its stake in Bangalore International Airport Ltd (Bial) to 43% by acquiring a 14% holding from Siemens Project Ventures GmbH.

The company, which will become the biggest shareholder in Bial, exercised its first right of refusal to acquire the shares at 114, valuing the transaction at 613.8 crore.

As the largest shareholder in Bial, Siemens had to stay invested for at least three years, which got over in June, before becoming eligible to dilute up to 14%. It will need to stay invested for a total seven years before it can exit the venture.

In December 2009, GVK Power acquired a 17% stake in Bial from India’s largest engineering firm Larsen and Toubro Ltd (L&T) for 686 crore. A month before that, it had acquired 12% of Zurich Airport’s stake in Bial for 484.6 crore. Both deals priced Bial shares at 105.

While L&T has sold its entire stake, Zurich still holds a 5% stake after selling 12% in November. The Airports Authority of India, representing the Union government, and a local government body, the Karnataka State Industrial Investment and Development Corp. Ltd, own 13% each in the firm.

In January, GVK Power had signed two agreements with the government of Indonesia to develop greenfield international airports in North Bali and Yogyakarta, Java.

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