GMR Infrastructure (GIL) today announced that with respect to certain arbitration proceedings administered by the Singapore International Arbitration Centre, it has received the consent award from the arbitral tribunal based on the settlement agreement signed by it with private equity investors viz. SBI Macquarie, Standard Chartered Private Equity, JM Financial Old Lane and others (Investors), which had invested an amount of Rs 14.78 billion in the form of Compulsorily Convertible Preference Shares (CCPS) in GMR Airports (GAL) in FY2011 & FY2012.

Pursuant to the settlement agreement, all parties decided to withdraw the ongoing arbitration and pursuant to binding agreements giving effect to the terms of the settlement the Investors (along with certain of their affiliates) would acquire 5.86% equity of GAL at a 100% valuation of Rs 210 billion and receive a payment of Rs 35.60 billion in lieu of their entire CCPS.

The cash payment would be partly funded by GIL through sale of its following airport related equity ownerships to GAL:

> Its entire shareholding of 40% in CEBU airport in Philippines at a 100% valuation of USD 590 million;

> Its entire shareholding of 50% in Clark EPC project in Philippines at a 100% valuation of USD 9.7 million;

> Its entire shareholding of 40.1% in Delhi Airport Parking Services at a 100% valuation of Rs 4.99 billion.

The aforesaid shareholdings are being acquired by GAL based on valuations by Duff & Phelps. GAL would fund these acquisitions by a fresh issue of Non-Convertible Debentures of Rs 20.05 billion subscribed by the Investors and/or certain of their affiliates.
 
This is significant positive development for the GMR Group. It re-enforces fundamental strengths of Airport business and also paves the way for value unlocking of the Airport business. This will act as a catalyst for potential deleveraging of GIL balance sheet and value creation for shareholders.

The resultant shareholding of GAL would be as under:

> GIL / it's subsidiaries : 91.95%,
> Employee Welfare Trust : 2.19%
> Investors : 5.86%

GBS Raju, Chairman, Airport Sector said, ''This is a momentous occasion for GMR group. We thank our Investors for contributing to the growth of GAL as an airport operator platform growing from 2 airports assets at the time of their investment to current 6 airports assets (including Nagpur Airport, for which we have emerged as highest bidder. GMR also appreciates their trust & confidence in the future growth of this platform by being a continuing partner. We remain committed and bullish on the airport infrastructure business opportunities which encompasses growth of consumer business and commercial property business surrounding the airport.''

Shares of the company declined Rs 0.55, or 3.44%, to trade at Rs 15.45. The total volume of shares traded was 575,645 at the BSE (9.43 a.m., Monday).