Fairfax India, through its wholly-owned subsidiary, is set to increase its stake in Bangalore International Airport Limited (BIAL) to 30.4% following a $255 million deal. Upon completion, Anchorage Infrastructure Investments Holdings, Fairfax’s flagship investment arm for airports and infrastructure, will hold the largest stake at 43.6%, while the Airports Authority of India (AAI) and Karnataka State Industrial and Infrastructure Development Corporation (KSIIDC) will retain their 13% stakes each.
Key Details of the Deal
- Stake Increase: Fairfax India has steadily expanded its holdings in BIAL, which operates Kempegowda International Airport, one of India’s busiest airports.
- Payment Structure: The $255 million transaction will be made in three instalments:
- First, at deal closure in early 2024.
- Follow-up payments in August 2025 and July 2026.
- Leadership Confidence: Prem Watsa, Chairman of Fairfax India, lauded the management of BIAL under Hari Marar, highlighting confidence in the airport’s growth trajectory.
Strategic Importance of Kempegowda International Airport
- Operated under a concession agreement valid until 2068, BIAL is a critical hub in India’s aviation network.
- In the last fiscal year, the airport generated $305 million in revenue, showcasing its financial strength.
- Robust passenger and cargo traffic positions BIAL as a key player in India’s economic and aviation sectors.
Fairfax’s Investment Vision
- This move aligns with Fairfax India’s broader strategy to capitalize on India’s infrastructure growth potential.
- In June 2019, Fairfax launched Anchorage Infrastructure Investments Holdings to focus on long-term airport and infrastructure projects.
- Fairfax’s steady investment in BIAL reflects its confidence in India’s burgeoning infrastructure sector and the airport’s operational efficiency.
The transaction, pending shareholder approval in January, is expected to close in Q1 2024, further cementing Fairfax’s stake in one of India’s most strategic infrastructure assets.
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