GMR Megawide Cebu Airport Corporation GMCAC a joint venture between GMR Infrastructure Ltd 40 percent shareholding and Megawide Construction Corporation 60 percent shareholding has signed financing documents of its Mactan Cebu International Airport located in Cebu Philippines. The financing will fund 70 percent of its total project cost of Php 33 billion approximately US Dolor 750 mn

BDO Capital and Investment Corporation acted as Lead Arranger to the transaction. The loan is being financed by a consortium of six banks.

Total equity contribution of GMR to GMCAC will be approximately US Dolor 90 mn, out of which GMR has already invested US Dolor 48 mn and do not envisage any further investment in the near future.

GMCAC shall be responsible for construction, development, renovation, expansion and operation of the Mactan Cebu International Airport for a period of 25 years as provided in the Concession Agreement.

This marks a key milestone for GMCAC in its journey to transform MCIA into a world class airport. MCIA is the first airport in Philippines to be privatized under the administrations ambitious programme aimed at modernizing key infrastructure assets.

In the international competitive bidding process GMR Megawide Consortium had emerged as the highest bidder after offering a bid premium of 14.4 billion Philippine Pesos approximately US Dolor 305 mn. The formal award of the project in April was followed by a six month transition period to complete project formalities leading to the transfer of operations to GMCAC on November 1 2014.

Commenting on this occasion, Mr G M Rao, Chairman, GMR Infrastructure Ltd said “The financial closure of the project signifies the confidence of the banks in the abilities of GMR and our partner Megawide. GMR Group has proven credentials in airport operations and modernization and we are confident that we will undertake this prestigious project in a timely manner and deliver an airport that Cebuanos and Filipinos will be proud of.”

The Cebu airport project is an excellent addition to GMR Groups portfolio with cash inflows from day one and is expected to make profits from the first year itself. With existing connections to tourist spots in the Central and Southern Philippines and with direct flights from Asian cities such as Hong Kong, Singapore Seoul and Tokyo it has huge untapped growth potential. The underdeveloped commercial business and a decisive stable regulatory regime provide an opportunity to convert the traffic potential into bottom line growth.

As part of the overall master plan GMCAC will build a brand new terminal building within three years to cater to the growing traffic. At the same time the immediate priority will be to upgrade the existing terminal and enhance operating systems and processes to improve service quality and efficiency. Alongside, GMCAC will lay adequate emphasis on corporate social responsibility and work towards socio-economic development in the surrounding region.

GMR Megawide Consortium plans to develop the Mactan Cebu International Airport into a regional hub in the Philippines creating passenger and cargo traffic growth jobs for local community giving a boost to the tourism traffic and creating multiplier economic benefits for the region.

For further information about GMR Group visit https://www.gmrgroup.in/index.html