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 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.
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.S/ 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.