Mumbai: GMR Group’s Delhi International Airport (DIAL) is in discussions with bankers, including HSBC and JP Morgan, to assess investor interest in a potential debt issuance of up to $350 million. The exact nature of the issuance is yet to be determined. The funds raised through this issuance would be used to refinance existing dollar bonds of the New Delhi airport. The company is currently reviewing their existing bond covenants to ensure they have the necessary flexibility for refinancing.
The bond issue date has not been finalised yet, as the company is evaluating international market conditions. The GMR Group, through its subsidiary GMR Airports, is the largest shareholder in DIAL with a 64% stake.
The GMR Group plans to use the proceeds from the bond issuance to refinance a $450 million note due in October 2025. This note was issued by DIAL’s offshore special purpose vehicle, India Airport Infra. Fitch Ratings had upgraded the ratings and outlook on India Airport Infra’s senior secured notes in November 2023. The ratings agency expects DIAL’s deleveraging to pick up in the next 18-24 months, supported by growth in passenger traffic and resolution of key regulatory issues.
Additionally, the GMR Group has undertaken a capital expenditure program of ₹12,616 crore, including a cost overrun of ₹1,066 crore, to increase passenger capacity by 34 million. By February 2024, the company had already spent about ₹10,900 crore and completed 98.9% of the Phase III expansion of the airport. The project is expected to be operational before April 2024, according to ICRA.
In order to fund the cost overrun, DIAL plans to raise ₹800 crore through non-convertible debentures (NCDs), with the remaining funds to be sourced from internal funds. The airport operator aims to complete its current capex cycle and further reduce leverage through this financing.
