text: GMR's Delhi Airport plans to raise $500 million via offshore bonds, Real Estate News, ET RealEstate
  August 29, 2016, 11:30 IST
  MUMBAI: Delhi International Airport, a company owned by Bengaluru-based GMR Infrastructure, plans to raise as much as $500 million by offering offshore bonds to take advantage of record-low rates and refinance borrowings.
  The company is in talks with investment bankers and roadshows are expected within a few weeks, people with knowledge of the matter told ET. "We are aiming to complete the issue within this quarter -before September 30," one of the people said.
  While GMR is looking at a seven-year tenure, bankers are suggesting 3-5 years, citing global trends for high-yield bonds, the people said. The proceeds will be used to refinance high-cost debt and lower its borrowing costs.
  "The company may gain 50-70 bps in borrowing costs this time as globally, liquidity is flush with investors scouting for higher yields," said one of the people. GMR had a net debt of about Rs 40,120 crore as of March 31, according to an investor presentation in July.
  Citigroup, Standard Chartered, Bank of America-Merrill Lynch and two other large banks are helping GMR, though there is no official mandate yet. Citi and Standard Chartered are ahead in the race, said another person familiar with the matter.
  GMR had planned a masala bond issue earlier. It scrapped those plans and decided to raise capital through DIAL, the people said. Masala bonds are rupee-denominated securities issued by Indian companies to overseas investors, who bear the currency risk. While DIAL is likely to issue dollar bonds, the option of masala bonds hasn't been ruled out.
  GMR declined to comment on the bond offer plan. "We would not like to comment on this issue," a GMR spokesperson said in an email.
  In January last year, DIAL mopped up $289 million via offshore bonds with seven-year maturity. Those securities, which had offered a fixed coupon of 6.125 per cent, were oversubscribed more than 16 times and the proceeds were used to repay external commercial borrowings. GMR has been trying to raise capital by offering equity and debt and by trying to sell assets to cut its borrowings. GMR has re-engaged with French airport developer Paris Aeroport to sell up to 49 per cent in GMR Airports for an estimated Rs 10,000 crore ($1.5 billion).
  The conglomerate is in advanced negotiations with private equity funds such as Kohlberg Kravis Roberts & Co. and Apollo Global Management, along with sovereign wealth fund Abu Dhabi Investment Authority and Canadian pension giant PSP Investments to sell a controlling stake in its Hyderabad airport.
  Last December, GMR raised $300 million from Kuwait Investment Authority through a foreign currency convertible bond issue.