Zurich Airport to exit BIAL

 Switzerland’s Zurich Airport on Monday announced that it has reached an agreement to sell its 5% minority shareholding in Bangalore International Airport Limited (BIAL) to Fairfax Holdings for $48.9 million before taxes, and the transaction is subject to customary closing conditions and is expected to be completed within the third quarter of 2016.

BIAL owns and operates the Kempegowda International Airport Bengaluru (KIAB) under a 30-year concession agreement (with a further 30-year extension option) from the Government of India.

Recently, GVK announced its plan to sell a 33% stake in BIAL to Fairfax India Holdings Corporation and Fairfax Financial Holdings to raise money to repay debt. The move would leave the former’s stake in the airport company at 10%.

KIAB has the distinction of being the first greenfield airport in India, built by the private sector under a public-private partnership.

“Zurich Airport pioneered the airport privatisation process in India and was selected in 2001, as the operator and shareholder for this greenfield airport. Since the start of construction in 2005, Zurich Airport successfully transferred its operational expertise to BIAL through an Operations, Management and Services Agreement (OMSA), which transformed KIAB into India’s third largest and one of the fastest growing airports,” Zurich Airport said in a statement.

“Through this value contribution and with the conclusion of the OMSA contract in 2015, Zurich Airport’s role has been gradually reduced to a minority shareholder leading to the decision to monetise the remaining 5% stake in BIAL. In 2009, Zurich Airport has already sold 12% of its shareholding in BIAL to GVK Power and Infrastructure,” the statement said.