After the purchase, Tata will hold 20% in GMR's airport unit

A consortium of Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management will invest8,000 crore ($1.2 billion) to buy a stake in GMR Airports Ltd, which runs India’s biggest airport.

The deal will pump 1,000 crore into GMR Airports, a unit of GMR Infrastructure Ltd. and purchase 7,000 crore of the airport unit’s equity shares from the parent, according to a statement. GMR operates Delhi International Airport Ltd., Asia’s sixth biggest.

After the purchase, Tata will hold 20% in the airport unit, while GIC will get 15% and SSG will own 10%, the company said in a filing. The deal values GMR Airports at 18,000 crore.[starlist][/starlist]

The deal marks Tata’s entry into the airports business amid a one trillion-rupee-plan by Prime Minister Narendra Modi to develop airfields in India’s remote towns and villages. Tata, which owns two local airlines, follows billionaire Gautam Adani’s bet on the sector after his firm won bids to operate six local airports last month.

GMR Infrastructure, which has net debt of $2.9 billion at the end of December 2018, has been selling assets to pay off liabilities. GMR competes with GVK Power & Infrastructure Ltd., which runs the airport in the financial capital of Mumbai.

GMR shares jumped as much as 9.8% to the highest intraday level since Sept. 3 in Mumbai, while the broader S&P BSE Sensex index rose 0.6%. GMR Also operates airports in Hyderabad and Cebu, while it is developing greenfield airports in Goa and Crete, Greece.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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