GMR Airports Plans to Raise $245 Million with Long-Term Bond Sale for Debt Refinancing

GMR Airports of India is on the way to accumulate almost ₹22 billion ($245 million) through the issuance of a 15-year bond, which is not only the company’s longest-tenor debt fundraising till now but also the largest amount that they have ever raised for a single tenor from that time, reported Reuters citing the sources. This situation is still a part of the airport operator's attempts to refinance debt and better manage its capital structure.

As per one of the sources, the sale of the bonds is expected to contribute predominantly to the refinancing of the debt of GMR Hyderabad International and also for general corporate purposes. GMR Airports, which is now controlling the major airports in India including those of Delhi and Hyderabad, has been adopting a strategy of gradually replacing high-cost foreign-currency loans with local ones, and this is an expected practice to continue.

Previous Fundraising and Financial Policy

The local funding GMR Airports has become more advantageous after the former last year around ₹63 billion in structured debt invested by Abu Dhabi Investment Authority in GMR Enterprises, the parent holding company of the GMR Group.

In August, GMR Airports raised ₹59 billion through bonds maturing in 18 months and three years, and offering an annual coupon rate of 10.50% for both tenors. GCR currently classifies GMR Airports' bonds as 'A' with the reasoning of their strong creditworthiness.

The fresh long-term bond issue indicates that GMR Airports still has the major intention of improving its financial position and cutting the expensive money borrowed in foreign currencies thus paving the way to more sustainable growth in the Indian aviation sector.