KUALA LUMPUR (March 27): Malaysia Airports Holdings Bhd (MAHB) is exiting the airport business in Maldives via the disposal of its entire 23% stake in GMR Male International Airport Ltd (GMIAL) for US$7.3 million (RM28.5 million).
MAHB expects to realise a gain of US$7.3 million from the sale as the total carrying value of GMIAL in the airport operator's book has been fully impaired in 2014.
The airport operator had invested a total equity of US$6.9 million for the 23% shares in GMIAL, which holds a 25-year concession to operate the Ibrahim Nasir International Airport in Maldives.
MAHB told Bursa Malaysia in a filing today that its wholly-owned subsidiary Malaysia Airports (Labuan) Pte Ltd (MALPL) had on March 14 entered into a share purchase agreement with GMR Holdings Pvt Ltd for the disposal of 8.81 million shares or a 23% stake in GMIAL to GMR Holdings.
GMR Holdings currently holds the remaining 77% stake in GMIAL.
MAHB said the proposed disposal is not expected to have any effect on its issued and paid-up share capital and/or its substantial shareholders’ shareholding in the group.
On Nov 27, 2012, the Maldives government together with Maldives Airports Co Ltd (MACL) had declared that the concession agreement with GMIAL which was awarded in 2010, as void ab initio.
The dispute was brought to an arbitration tribunal as per the dispute resolution mechanics stipulated under the concession agreement. The arbitration tribunal declared that the concession agreement was valid and binding and was not void ab initio.
The arbitration tribunal further declared that the Maldives government and MACL were liable in damages to GMIAL for loss caused by wrongful repudiation of the agreement. On Nov 16, 2016, the Maldives government paid US$271 million being the damages to GMIAL.
MAHB said these funds are expected to be utilised for settlement of GMIAL’s bank borrowings, creditors and other accrual expenses.
MAHB shares closed up 3 sen or 0.34% at RM8.87 today, giving it a market capitalisation of RM14.72 billion.