The Hindu : Business : HIAL achieves financial closure

Online edition of India's National Newspaper
Wednesday, Aug 24, 2005

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Business

HIAL achieves financial closure

Special Correspondent

Hopes to reach breakeven in eight-ten years

— Photo: Satish H.

SET FOR TAKE-OFF: The Managing Director of GMR group, Kiran K. Grandhi, addressing a press conference to announce the financial closure of Hyderabad International Airport in Hyderabad on Tuesday.

HYDERABAD: The Hyderabad International Airport Limited (HIAL), a public-private partnership of GMR group, Malaysian Airports Holding Berhad (MAHB), Airport Authority of India (AAI) and the Andhra Pradesh Government, has achieved financial closure for the greenfield international airport project at Shamshabad on the city outskirts.

Rs. 1,663 crore project

The company has achieved a major milestone by tying up loans totalling Rs. 960 crore with a consortium of eight banks led by IDFC. The total cost of the project is pegged at Rs. 1,663 crore with an additional contingency of Rs. 97 crore. Of the total cost, Rs. 378 crore would be raised through equity and Rs. 960 crore through debt while the State government would provide an interest-free loan of Rs. 315 crore besides an additional Rs. 107 crore as grant.

Holding pattern

The debt:equity ratio is at 1.2:1 with the shareholding pattern being GMR (63 per cent), MAHB (11 per cent), AAI (13 per cent) and the State Government (13 per cent), according to HIAL Managing Director, Kiran K. Grandhi.

The tenor for repayment of loans from the opening of the new airport was 16 years while the interest-free loan of Rs. 315 crore from the State government was repayable during the operation of the project, he said. HIAL would issue To Proceed notices to contractors by September 1 and the first flight from the airport was likely to take off in the first quarter of 2008.

The airport was being developed over 5,500 acres, of which works for the development of facilities to cater to seven million passengers annually would be taken up in the first phase. There would be 30 parking stands and 38 acres was allocated for the development of hangars and other facilities, while the HIAL proposed to raise revenues through aeronautical fee, aero-related facilities and other passenger services besides the retail component. The company was hopeful of achieving breakeven in eight to ten years, he added.

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