Shares of GMR Infra on NSE rose more than 5% in Friday’s trade after the company’s subsidiary GMR Airports signed an agreement with Aboitiz InfraCapital to divest its stake in Mactan-Cebu International Airport.

GMR Airports International BV (GAIBV), a subsidiary of GMR Infrastructure Limited, has entered into a definitive agreement with Aboitiz InfraCapital Inc (AIC) in its acquisition of shares in GMR-Megawide Cebu Airport Corporation (GMCAC) on behalf of AIC.

GMCAC, a joint venture between GAIBV and Megawide Construction Corporation (MCC), is the developer and operator of the award-winning Mactan Cebu International Airport (MCIA).

The agreement involves issuing primary shares by GMCAC and transferring secondary shares worth PhP 9.5 billion from Megawide and GAIBV to AIC, which will result in the latter owning 33% and 1/3% minus one share of GMCAC.

Meanwhile, the transaction also involves Rs 1,100 crore worth of convertible notes issued by Megawide and GAIBV for a total of Rs 2,200 crore (notes). The notes will mature on October 30, 2024, and will be exchanged by AIC for the remaining approximately 66% plus one share of GMCAC’s issued share capital.

Meanwhile, the transaction also involved issuing the 7.75 billion in exchangeable notes by Megawide and GAIBV for a total of PhP 15.5 billion.

The notes will mature on October 30, 2024, and will be exchanged by AIC for the remaining 66% and 2/3% and one share of GMAC’s outstanding share capital.

The transaction has an enterprise value of PhP 49.7 billion (Rs 70.5 billion), and GAIBV will receive an advance payment of PhP 9.4 billion (Rs 13.3 billion) instead of shares transferred and notes issued.

At 10.50 am, the stock was up 4.17% at Rs 40 from its previous close of Rs 38.40. The stock has risen nearly 30% in the past year but has lost more than 16% in 2022.

Mr Srinivas Bommidala, Chairman of GMR Group International Airports, said: “Over the past eight years, we have completed our expansion plans and have become one of the fastest growing airports in the region with steady returns.”

“The decision to divest our stake in GMCAC is also in line with GMR Airports’ strategy to focus on deleveraging and redeploying capital to capture high growth opportunities,” he added.

A portion of GMAC’s major investment will be used to acquire established entities providing services at Cebu Airport.

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AIC is the infrastructure arm of the Aboitiz Group, recognised as one of the best-managed companies in the Philippines and Southeast Asia. AIC aims to build purpose-driven infrastructure and become one of the cornerstones of the country’s economy.