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MUMBAI: GMR Infrastructure Ltd (GIL) will restructure its many business verticals, and plans to spin-off and list its airports business separately.

In an exchange announcement on Thursday, the company said its board of directors has approved this vertical split demerger, which "will go a long way in facilitating deeper understanding of the airport business independently as compared to other business verticals within the group."

The GMR group’s airport portfolio has around 172 million passenger capacity in operation and under development, comprising India's busiest Indira Gandhi International Airport in New Delhi, Hyderabad’s Rajiv Gandhi International Airport, Mactan Cebu International Airport in partnership with Megawide in the Philippines while greenfield projects under development includes an airport at Mopa in Goa and another airport at Heraklion, Crete, Greece in partnership with GEK Terna.

The GMR-Megawide consortium has won the Clark International Airport’s EPC project, the second project in the Philippines. The Group recently signed the concession agreement for the development and operation of a greenfield airport at Bhogapuram in Andhra Pradesh. It also signed concession agreement to commission, operationalise and maintain the civilian enclave at the Bidar Airport in North Karnataka.

GMR Group is developing very unique airport cities on the commercial land available around its airports in Delhi, Hyderabad and Goa.

According to the proposed scheme of arrangement, the non-airport business of GIL--energy, urban infrastructure, EPC services--will be moved to GMR Power and Urban Infra Ltd (GPUIL) as a going concern, while GIL will turn into a pure-play airport-owning company.

The scheme will create a mirror shareholding of GIL in GPUIL with all existing shareholders of GIL becoming shareholder of GPUIL in the same proportion. The scheme envisages issue of one additional share of 5 each of GPUIL for every 10 shares in GIL of Re 1 each as on the record date.

The appointed date for the scheme has been fixed at April 1, 2021.

Explaining the rationale for the restructuring, GMR Infra, in a press release, said each of its multiple business segments have distinct business models, operating nuances, capital commitments, risk and return profile, etc.

"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 specialisation, building further on its capabilities and strong brand presence."

Grandhi Kiran Kumar, managing director and CEO, 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. We are equally excited that our non-airport businesses in GPUIL, with our deep understanding and pre-qualifications backed by superior execution track record, is well positioned to create value for all stakeholders."

The scheme is subject to the customary approvals from the stock exchanges, Securities and Exchange Board of India, National Company Law Tribunal, shareholders, and creditors, etc.

GMR’s energy business has a diversified portfolio of around 4,995 MW, of which about 3,040 MW of coal, gas and renewable power plants are operational and around 1,955 MWs of power projects are under various stages of construction and development.

The group also has coal mines in Indonesia, where it has partnered with a large local player. Transportation and urban infrastructure division of the group has four operating highways project spanning over 1,820 lane km. The group has a large EPC order book of railway track construction including government of India’s marquee Dedicated Freight Corridor project. It is also developing multi-product Special Investment Regions spread across 2500 acres at Krishnagiri in Tamil Nadu and 10,400 acres at Kakinada in Andhra Pradesh.

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