Singapore's Changi Airports International is now out of the race to pick up stake in GVK's airports business due to regulatory issues, a senior GVK official said.
GVK Group CFO Issac George said the stake sale could not proceed as planned due to a lower valuation and currently due diligence is undertaken by one of the investors.
"Changi went back because of India story being bad like Vodafone retrospective tax and General Anti-Avoidance Rules (GAAR) introduction. Otherwise, a terms sheet was also signed with them," George said on the sidelines of the recently held company's Annual General Meeting here.
GVK Group, which manages two international airports in India - Mumbai and Bangaluru, earlier said it has received proposals from as many as five companies including Changi Airports showing interest to pick up stake in its airports business, a senior official of the group had earlier said, adding, they were looking to raise over Rs 2,500 crore through stake sale.
GVK, through its wholly owned GVK Airport Developers Pvt Ltd unit, holds 50.5% of a consortium that operates the Mumbai airport. It has a 43% stake in a separate consortium that runs the airport in Bangalore.
Over the last three-two years, GVK has increased its equity holding in Mumbai International Airport Ltd (MIAL) from 37% to 50.50%, making it a subsidiary of the company. Similarly, it has hiked its holding in Bangalore International Airport Limited (BIAL) to 43% from 29%.
"The problem is quite a lot of people have already given the term sheets. The valuation that they are considering is not something which we are not accepting. Right now there is due diligence going on by one of the investors. We are not desperate to sell our airport unless and until we get the right kind of price," he added.
MIAL was formed by GVK-led consortium (74%) and Airports Authority of India (26%).
BIAL was constituted with 26% stake held by the Airport Authority of India and the Karnataka State Industrial Investment and Development Corporation, while the remaining 74% is held by private promoters.
In January 2012, GVK acquired 43% of this equity from other investors.