GMR Megawide Cebu Airport Corporation tied up funds for Philippines airport project

Dec 23, 2014 18:27 IST

GMR Megawide Cebu Airport Corporation (GMCAC) on 22 December 2014 tied up the finances of nearly 525 million US dollars for developing Macatan Cebu International Airport in Philippines. GMCAC is a joint venture of GMR Group and Manila-based Megawide Construction.

The tied up finances of 525 million US dollars is 70 percent of the total cost of 750 million US dollars (or 33 billion Philippines Pesos) that is required to develop the Cebu International airport.

Philippines-based BDO Capital & Investment Corporation acted as the lead arranger to the transaction and the loan is being provided by a consortium of six banks.

The financial closure was done under a 25-year concession agreement that GMCAC signed. Under the concession agreement

  • The GMR Group will hold 40 percent equity in the Joint Venture firm GMCAC and 60 percent equity will be held by Megawide Construction.
  • The total equity contribution of GMR to GMCAC will be around 90 million US dollar, out of which GMR has already invested 48 million US dollar and the balance will be paid over four years.
  • It will be responsible for construction, development, renovation, expansion and operation of the airport for a period of 25 years as provided in the concession agreement.
  • GMCAC will build a brand new terminal 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.

Mactan Cebu is the first airport in Philippines to be privatised under the administration’s ambitious public-private partnership programme, aimed at modernising key infrastructure assets.

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