Aéroports de Paris - Groupe ADP and GMR Enterprises enter into
agreement to form an airport holding company listed on Indian Stock
Exchanges by the first half of 2024
FINANCIAL RELEASE
March 19th 2023
Aéroports de Paris SAGroupe ADP
and GMR Enterprises enter
into agreement
to form an
airport holding company
listed on Indian
Stock
Exchanges by the first
half of 2024
The Boards of
Directors of
Aéroports de Paris
(Groupe ADP) and
GMR Airports
Infrastructure Ltd (GIL),
both listed
companies and
co-shareholders of a
respectively 49% and 51%-stake in the airport
holding
GMR Airports
Ltd (GAL), have
approved the execution of a
Framework Agreement1
initiating the process
aiming at a merger between GIL and
GAL in the first half of 2024
("New GIL").
The contemplated
merger, will
allow Groupe ADP
to become shareholder of
an airport company
listed on BSE Limited
and National Stock Exchange of India
Limited ("Indian Stock
Exchanges"),
as contemplated when
acquiring its stake in
GAL in 2020.
This operation will:
-
Simplify and clarify the capital structure of the
airport holding
company;
-
Fully reveal the value of
GAL and provide liquidity to the stake held by
Groupe ADP;
-
Make New GIL a more agile
development platform to capture new opportunities in India and
South-East Asia.
"Three years after our acquisition of a stake in
the Indian group GMR Airports, a new step in our presence in Asia
commences today. The operation launched today will reveal the value
of our stake through an airport company listed on the Indian Stock
Exchanges. This operation will enable us to fully seize the
development opportunities of the Indian airport market in the
coming years. With TAV Airports, a group listed in Turkey, and GMR
Airports, to become listed in India by mid-2024, Groupe ADP, itself
listed in Paris, will hold a unique position in the airport
industry. It is thus initiating an original model for financing its
development. As a multi-local global player, Groupe ADP pursues its
ambition to create value for all stakeholders and puts
decarbonization of its operations as a common objective for all its
airport platforms." stated
Augustin de
Romanet, Chairman and CEO of Groupe
ADP
* *
*
As provided for in the Framework Agreement
signed today and subject to the approval of the creditors and
shareholders of GIL and GAL and of the required regulatory
approvals, GAL and GIL would merge in the first half of 2024,
forming an airport holding company listed on the Indian Stock
Exchanges.
The Framework Agreement provides for the
following characteristics:
-
Groupe ADP would hold 45.7% economic interest in New GIL, according
to independent valuation exercises and supported by fairness
opinions;
-
Earnouts and ratchets2 contracted between Groupe ADP and GIL upon
the acquisition of the stake in GAL by Groupe ADP in
2020, would be fully settled;
-
Residual contingent liabilities of GIL related to non-airport
activities would be significantly reduced, allowing Groupe ADP to
become shareholder of the listed entity with no exposure to such
liabilities;
-
Groupe ADP would be entitled, through a shareholder agreement, to
extended rights in New GIL's governance, similar to those held
currently in GAL, hence preserving its significant influence.
In detail, this operation aims at several
strategic and financial objectives:
1. The operation will
allow New GIL to become an
airport pure-player
Since its demerger from GMR Power and Urban
Infra Ltd. (GPUIL) at the beginning of 20223,
GIL has held exclusively airport assets on its balance
sheet. However, it has continued to carry important residual
contingent non-airport liabilities related to GPUIL,
GMR-Enterprises' (GMR-E) non-airport infrastructure arm.
To accelerate the settlement of these contingent
liabilities and become an airport pure-player, Groupe ADP proposes
to subscribe to 330,817 Foreign Currency Convertible Bonds (FCCBs)
issued by GIL for a total amount of c.331 million euros. As per the
Framework Agreement, the proceeds from these FCCBs will be
used by GIL to clear its balance sheet by way of repaying corporate
debt and also settling a major part of its liabilities. This
reorganization of liabilities will constitute a condition precedent
for the merger of GAL and GIL.
2. Groupe ADP will
retain a substantial economic
interest in GIL's capital, while
preserving the local
nature of GMR Airports
Groupe ADP would hold 45.7% economic interest in
New GIL4, according to independent valuation exercises and
supported by fairness opinions. This takes into account the
definitive settlement of ratchets clauses and includes a liquidity
premium.
In line with Groupe ADP's multi-local approach,
the framework-agreement provides for GMR-E to maintain its position
as controlling shareholder in New GIL. To signify this positioning,
Groupe ADP’s shareholding in New GIL will be segregated into two5
categories of instruments:
(i) ordinary
equity shares, and
(ii) Optionally Convertible
Redeemable Preference Shares (OCRPS), entitled to a dividend
equivalent to an ordinary equity share, and allowing Groupe ADP to
retain a substantial interest in the performance of the asset.
Upon completion of the merger between GAL and
GIL, Groupe ADP's 45.7% economic interest will be applied to
account for the results of the New GIL, which will be consolidated
under the equity method into the group's accounts. Until
the merger completion, the 49% stake held by Groupe ADP in GAL
remains accounted for under the equity method.
Simplified shareholding and economic
interest in GAL and in
New GIL:
See attached release
3. Make
New GIL a more agile development platform
to capture new opportunities in India and
South-East Asia
GAL possesses major assets in India, including
the airports of Delhi (first in Asia-Pacific to reach ACA6 level
4+), Hyderabad and Goa (opened on January 5th, 2023), and in
Indonesia, as well as several other airport projects under
development in India and Greece, with attractive prospects for both
growth and medium-term profitability.
In the coming years, the potential for external
growth in Asia is important, driven by the need for airport
infrastructure investments in the region. In India in particular,
privatizations projects have been announced by the government. To
fully exploit those growth opportunities, the merger of GAL and GIL
would allow New GIL to form a more agile platform able to capture
this profitable development potential.
* *
*
Estimated timetable of the contemplated
merger
Subsequent to the approval of merger scheme by
the respective boards of directors of GAL and GIL today, GIL will
submit the merger application to the Indian Stock Exchanges
where GIL is currently listed for their approval and to the
Securities and Exchange Board of India (SEBI). The merger
application will be subsequently filed for approval with the
National Company Law Tribunal (NCLT).
The merger is expected to be effective by the
first half of 2024 following completion of all relevant steps.
The Framework Agreement signed today between GMR-E, GIL, GAL
and Groupe ADP commits all parties to complete the necessary steps
toward the merger, subject to all regulatory approvals.
Expected impact on
Groupe ADP's consolidated financial
statements
The subscription of FCCBs, to be accounted for
as financial assets measured at fair value, will lead to a cash
expense of c.331 million euros in the coming weeks. A provision
regarding earn-outs clauses being already accounted for in Groupe
ADP's accounts, their settlement will be neutral in the
group's P&L and lead to a cash expense of c.62
million euros before the merger.
Upon completion, the merger should result
in recording a non-cash expense, translating the change in
economic interest of Groupe ADP (including the settlement of
ratchets clauses as well as a liquidity premium) as well as the
integration of the assets of New GIL, excluding GAL, whose
expected net value at the date of merger
will be negative. The impact of these items,
currently estimated at c.100 million euros on Groupe
ADP's net income from ordinary activities, will be determined at
the date of merger.
Confirmation of 2023-2025 financial
targets
This operation, which contributes to
accelerating GMR Airports' profitable development, is in line with
the Group's strategy of selective international growth. Groupe ADP
hence confirms its objective of a net financial
debt/EBITDA ratio of 3.5x to 4.5x in 2025, including the
aforementioned expected impacts as well as potential new
international growth projects. Groupe ADP confirms
its dividend policy of a 60% payout ratio of the Net Result
Attributable to the Group for the 2023-2025 period, with a
minimum of €3.0 per share.
* * *
S&R and Associates and Hogan Lovells acted
as legal advisors and Urban Strategic Pte Ltd as a strategic
advisor to Groupe ADP.
CONFERENCE CALL
Augustin de Romanet, Chairman and CEO, and
Phillipe Pascal, Chief Financial Officer, will comment on this
announcement on Monday March
20th,
2020 at 8:00am (CET)
during a conference call in English, for
financial analysts and investors.
A live webcast will be
available at the following link: Webcast
To participate to the Q&A session,
please register on the
following link: Call registration
FINANCIAL CALENDAR (subject to change)
-
Next traffic publication - March 2023 traffic
figures: 17 April 2023, after market close
-
2023 first quarter revenue: 26 April 2023, after
market close
-
Annual General Meeting of shareholders: 16 May
2023
-
Ex-dividend
date7: 5 June 2023
-
Dividend
payment7: 7 June 2023
-
2023 Half-Year
results: 27 July 2023, after market close
-
2023 nine months revenue: 25 October 2023, after
market close
DISCLAIMER
This presentation does not constitute an offer
to purchase financial securities within the United States or in any
other country.
Forward-looking disclosures (including, if so,
forecasts and objectives) are included in this press release. These
forward-looking disclosures are based on data, assumptions and
estimates deemed reasonable at the diffusion date of the present
document but could be unprecise and are, either way, subject to
risks. There are uncertainties about the realization of predicted
events and the achievements of forecasted results. Detailed
information about these potential risks and uncertainties that
might trigger differences between considered results and obtained
results are available in the registration document filed with the
French financial markets authority on 18 March 2021 under
D.21-0149, retrievable online on the AMF website www.amf-france.org
or Aéroports de Paris website www.parisaeroports.fr.
Aéroports de Paris does not commit and shall not
update forecasted information contained in the document to reflect
facts and posterior circumstances to the presentation date.
Investor Relations contacts:
Cécile Combeau +33 6 32
35 01 46 and Eliott Roch +33 6 98 90 85 14 - invest@adp.fr
Press contact: Justine Léger, Head of Medias and Reputation
Department +33 1 74 25 23 23
Groupe ADP develops and manages airports,
including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget.
In 2022, the group handled through its brand Paris Aéroport 86.7
million passengers at Paris-Charles de Gaulle and Paris-Orly, and
nearly 193.7 million passengers in airports abroad. Boasting an
exceptional geographic location and a major catchment area, the
Group is pursuing its strategy of adapting and modernizing its
terminal facilities and upgrading quality of services; the group
also intends to develop its retail and real estate businesses. In
2022, group revenue stood at €4,688 million and net income at
€516million.Registered office: 1, rue de France, 93 290
Tremblay-en-France. Aéroports de Paris is a public limited company
(Société Anonyme) with share capital of €296,881,806.
Registered in the Bobigny Trade and Company Register under no. 552
016 628.
groupeadp.fr
APPENDIX - Summary of
aforementioned financial instruments
See attached release
1 Framework Agreement signed between Groupe ADP, GIL, GAL,
GMR-E.
2 Upon Groupe ADP's acquisition of its 49% stake
in GAL, completed in two stages in February and July 2020, Groupe
ADP granted GIL earn-out clauses, conditional upon the achievement
of certain performance targets of GMR Airports' activities by 2024,
as well as certain ratchets, conditioned to the occurrence of
certain commercial and regulatory events by 2024, allowing GIL to
receive up to respectively 126 million euros and 8.2% of the
capital.3 See December 31st, 2021 GMR Corporate announcement and
related disclosures.4 Excluding potential impact that would result
from a conversion of FCCBs.5 Excluding any potential equity
shareholding that may arise as a result of converting the FCCB.
6 Delhi International Airport has been
recognized Level 4+ (Transition) of the ACI’s Airport Carbon
Accreditation program on November 17th, 2020. 7
Subject to the approval of the Shareholders' General Meeting
approving 2022 accounts, to be held May 16th, 2023.
- Aéroports de Paris SA - Agreement between Groupe ADP and GMR
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