Aug. 7 (Bloomberg) -- GMR Infrastructure Ltd., operator of India's second-busiest airport, plans to buy airfields in Eastern Europe and the Middle East, where accelerating economic growth is driving demand for air travel.
The company is considering a final bid for airports in St. Petersburg in Russia and Prague in the Czech Republic, Chief Financial Officer Ashutosh Agarwala said. GMR proposes to sell shares in a company that will own the overseas assets within five years, he said in an interview in Mumbai on Aug. 5.
Bidding for airports in emerging markets is part of GMR's plan to spend $10 billion on overseas acquisitions in industries including power and infrastructure. Bangalore-based GMR in June bought 50 percent of Dutch utility InterGen NV for $1.1 billion and last year won a 1.93 billion euro ($3 billion) bid to manage an airport in Istanbul.
``Indian companies are trying to ride on the growth in Eastern Europe,'' said Jayesh Shroff, who helps manage the equivalent of about $4 billion at SBI Asset Management Co. in Mumbai. ``There will also be a lot of learning experience.''
Economies in the Middle East region, helped by a 64 percent surge in crude oil price in the past year, are spending billions of dollars to expand their airports. Ten Middle Eastern airports are investing $37 billion to boost capacity to accommodate an additional 318 million passengers a year by 2012, James Hogan, the chief executive officer of Etihad Airways said in February.
Soros, Citigroup
GMR Infrastructure, which in 2006 sold stock to billionaire George Soros and Citigroup Inc., fell 1.13 percent to 100.25 rupees in Mumbai at 10:46 a.m. The stock has declined 60 percent so far this year.
The company operates the New Delhi airport with Fraport AG, after buying the asset from the Indian government in January 2006. It developed and operates an airfield in the southern city of Hyderabad in partnership with Malaysia Airports Holdings Bhd.
``We would like to add at least two more airports to our portfolio in the next five years,'' Agarwala said. GMR has been short-listed for managing the Pulkovo airport in St. Petersburg, Russia, Agarwala said. Singapore's Changi Airport, Hochtief AG and Fraport AG are among the nine bidders, Vedomosti reported Aug. 1, citing an auction document. The Russian government expects a 10th straight year of growth in 2008 after the economy, one of the so-called BRICs along with China, India and Brazil, expanded 8.1 percent last year.
Strategic Partner
The company is also evaluating the Prague airport, which the Czech government plans to sell to a strategic partner. The government said on June 2 that it would sell Letiste Praha SP, operator of the Prague airport, to raise at least 100 billion koruna ($6.4 billion).
``We would be looking at airports that have the potential for scaling up,'' Agarwala said. ``That involves some risks, but you will get a higher return.''
The company is considering a final bid for airports in St. Petersburg in Russia and Prague in the Czech Republic, Chief Financial Officer Ashutosh Agarwala said. GMR proposes to sell shares in a company that will own the overseas assets within five years, he said in an interview in Mumbai on Aug. 5.
Bidding for airports in emerging markets is part of GMR's plan to spend $10 billion on overseas acquisitions in industries including power and infrastructure. Bangalore-based GMR in June bought 50 percent of Dutch utility InterGen NV for $1.1 billion and last year won a 1.93 billion euro ($3 billion) bid to manage an airport in Istanbul.
``Indian companies are trying to ride on the growth in Eastern Europe,'' said Jayesh Shroff, who helps manage the equivalent of about $4 billion at SBI Asset Management Co. in Mumbai. ``There will also be a lot of learning experience.''
Economies in the Middle East region, helped by a 64 percent surge in crude oil price in the past year, are spending billions of dollars to expand their airports. Ten Middle Eastern airports are investing $37 billion to boost capacity to accommodate an additional 318 million passengers a year by 2012, James Hogan, the chief executive officer of Etihad Airways said in February.
Soros, Citigroup
GMR Infrastructure, which in 2006 sold stock to billionaire George Soros and Citigroup Inc., fell 1.13 percent to 100.25 rupees in Mumbai at 10:46 a.m. The stock has declined 60 percent so far this year.
The company operates the New Delhi airport with Fraport AG, after buying the asset from the Indian government in January 2006. It developed and operates an airfield in the southern city of Hyderabad in partnership with Malaysia Airports Holdings Bhd.
``We would like to add at least two more airports to our portfolio in the next five years,'' Agarwala said. GMR has been short-listed for managing the Pulkovo airport in St. Petersburg, Russia, Agarwala said. Singapore's Changi Airport, Hochtief AG and Fraport AG are among the nine bidders, Vedomosti reported Aug. 1, citing an auction document. The Russian government expects a 10th straight year of growth in 2008 after the economy, one of the so-called BRICs along with China, India and Brazil, expanded 8.1 percent last year.
Strategic Partner
The company is also evaluating the Prague airport, which the Czech government plans to sell to a strategic partner. The government said on June 2 that it would sell Letiste Praha SP, operator of the Prague airport, to raise at least 100 billion koruna ($6.4 billion).
``We would be looking at airports that have the potential for scaling up,'' Agarwala said. ``That involves some risks, but you will get a higher return.''
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